If you are a contractor or freelancer working in the UK you may have been pitched the tax benefits of paying yourself through an Employee Benefit Trust (EBT).
With an EBT contractors receive just a basic wage equivalent to the Statutory National Minimum Wage. The remainder of their gross earnings go into an EBT, usually offshore. The company making the payment also claims Corporation Tax relief on these payments. The trust then “loans” back the money to the contractor and this loan is not therefore taxable. The loan is never repaid. In effect you receive your wages tax free.
EBT’s have been used from such professions as IT Contractors to Premier League Footballers.
