Major changes to be made to Employment Benefit Trusts
(EBT's) from 6 April 2011...
The 2011 finance bill has been a big topic for discussion
recently - many websites have published articles and information
about it and pretty much everyone in the contracting world is
talking about it. So, what's going on exactly? Well in
basic terms, the government has announced proposals for the 2011
finance bill that will essentially force contractor EBT's
(Employment Benefit Trusts) to come to an end.
There has been a tax loophole in the system for some time now
which many companies have been taking of advantage of. This
was only ever going to last for a limited period of time before the
government got wise to it, especially with the current "fairer and
simpler taxation" methods being introduced. The loophole saw
thousands of employees of EBT's receive payments, in the form of
loans, which are not subject to Income Tax and National Insurance
and do not have to be paid back. Many contractors were seeing
more than 80% of their invoiced money working via EBT's. This
opportunity seemed too good to be true for many contractors who
have unfortunately now learnt that it was!
The finance bill 2011, incorporating these proposals, will take
effect from the 6th April 2011 and is obviously going to
have huge effects on existing EBT's and all those contractors that
are currently employed by them. Contractors involved in EBT's
will now have to re-think their options. It's also worth
noting that HMRC are also clamping down on many other so called
offshore, tax efficient schemes so it would be wise not to try and
find an alternative offshore option. With this is mind, the
obvious options available are:
1) An umbrella company solution,
as this is a very similar system to that of an EBT but you are
taxed appropriately.
2) The other option would be for
contractors to set up their own limited companies.
If you are reading this information and are confused or
concerned about your options, and which would be better
for you, we can help.
Nasa Consulting is at the forefront of contractor accountancy
and tax legislation. Our accountants work with you to find
the most tax efficient way for your business to
trade and you can be assured of our honest and genuine
approach to business. We provide limited company and umbrella
company services for temporary workers, contractors and
SME's. Our expertise in contractor accountancy, payroll and
corporate tax helps our clients to save thousands of pounds
of unnecessary taxes each year. So, we may not be able to
offer the same tax advantages as you were used to, but we guarantee
that we will save you as much money as is possible, without drawing
any unnecessary attention from HMRC, as this is a headache you
really don't need!
A quick look at the two most common options available to
you:
Nasa
Umbrella
Low cost, hassle free umbrella company that helps increase
your take home pay by claiming business expenses- just £9.99 per
week. Want to hear more? Click
here.
Limited
Company Services
Setting up your own limited company can be a daunting
prospect, which is why Nasa Consulting offers a comprehensive range
of services designed specifically for contractors. From
forming the company (within 24 hours) to full accounting packages,
our rates are incredibly competitive.
Click here for more info.
So, if you would like some advice about your current situation
or would like to learn more about how we can help you, please
contact us on 0117 929 7683 or at info@nasaconsulting.com.
Our friendly team of experts will be happy to help.