The loan arrangers

Keith Gordon discusses a recent First-tier Tribunal decision concerning schemes where contractors were paid in loans

The current controversy surrounding the 2019 loan charge concerns arrangements where earnings were received in the form of loans from employee benefit trusts (EBTs). Such arrangements were widely marketed as tax-efficient because, instead of attracting tax and National Insurance at the usual rates, the amounts advanced to the employee would escape tax altogether (although there might then be a subsequent and continuing liability on the benefit of not then paying a market rate of interest under the beneficial loan rules).