EBT opportunity closes
A surprisingly large number of small companies used employee benefit trusts (EBTs) to avoid paying PAYE and NICs on loans made available to employees and directors.
The law changed in 2011 to make it clear loans through EBTs were taxable. HMRC offered employers the opportunity to settle disputed tax liabilities involving EBTs on favourable terms. However, those favourable terms will be withdrawn from 31 March 2015. All agreements under the EBT settlement opportunity must be finalised by 31 July 2015, with the tax due also paid by that date.
To minimise the penalties that apply when tax schemes go wrong, some tax investigation experts recommend using the Liechtenstein Disclosure Facility (LDF).
HMRC believe the LDF has been abused by employers who have used EBTs and who are now attempting to settle their tax affairs under the favourable conditions of the LDF. To prevent this abuse, the terms of the LDF have been changed so it cannot be accessed by users of EBTs which are already under enquiry by HMRC.
If you are still wondering what to do about an EBT you used before April 2011, our tax investigation experts can help point the way to a reasonable settlement.