Employee Beneficiary Trusts (EBTS) and Employer Funded Retirement Benefit Schemes (EFRBS)

With the 2019 Loan Charge Legislation coming into force on 5 April 2019, individuals who participated in these schemes will be facing significant tax charges on any loan sums outstanding as at that date.

The legislation has the power to go back 20 years to 5 April 1999 meaning the size of the tax bill will bankrupt most companies and individuals. It has been described as a “tax time bomb” and “tax Armageddon” by groups campaigning to have the legislation overturned. Even where the company in question is no longer trading or is insolvent, it is expected that HMRC will direct that liability to the individual. Whilst the legislation is the subject of a Judicial Review, such challenges in similar schemes have proved unsuccessful and, if continued, will result in years of litigation that will run on long after the tax charge falls due.

It is essential that anyone who has been exposed to these schemes seek urgent advice. Both tax advice in terms of settlement with HMRC and legal advice in terms of a claim against their advising accountant. Whether you are yet to pay HMRC or have settled in full you will have a claim against the advisers who recommended the scheme to you. However, there are strict time limits which apply to these claims and once those limits have expired the individuals and companies exposed to huge losses will not be able to bring a claim. We strongly urge anyone exposed to these schemes to seek immediate legal advice.

FS Legal is one of the very few law firms in the country specialising in claims arising from Employee Beneficiary Trusts (EBTs) and Employer Funded Retirement Benefit Schemes (EFRBSs). We have a leading team of expert lawyers who have been raked by independent directories Legal 500 and Chambers & Partners in this specific field.

Chambers & Partners note: The team is especially skilled at acting on high-value tax-related disputes” and Legal 500 comments: “FS Legal has a national reputation for high-profile, multi-million pound ‘big ticket’ litigation, in particular tax negligence claims having recovered seven-figure settlements……FS Legal is described by some as ‘the only pure financial services litigation firm outside London – its team is the envy of many of the top law firms it comes up against’.“

Our team has successfully pursued claims against accountants who recommended EBTs and EFURBS to their clients without explaining the significant risks involved – both to the company and the individuals personally. Equally, where those advisers have failed to advise participants to take up the HMRC settlement opportunity or, indeed actively advised not to do so. Often those trusted accountants were (unbeknown to the individual clients) paid substantial commission by the promoters of EBT and EFURBS schemes (and other similar schemes) to persuade their clients to participate in the schemes. This meant the accountants were unable to provide impartial and unbiased advice.

We work closely with some of the ‘big four’ accountancy firms to not only negotiate a reduction in liability with HMRC, but also to quantify and analyse the legal claims against negligent tax advisers and accountants who recommended EBTs and EFURBs. Those losses will include not only the additional tax payable to HMRC (together with interest) but also the fees paid to the scheme promoter, the costs involved in setting up the various Trusts and the ongoing costs of unwinding the schemes.

To discuss your specific circumstances in more detail without charge or obligation please call Julia Norris at our Manchester office.

To view the Firm’s Commercial Litigation Directory Rankings please click here for Chambers & Partners and click here for Legal 500.

Funding

We understand that, whether it’s a personal or business matter, funding is a key concern. We have a variety of funding options available to seek to remove the risk and cost from our clients. Unlike most firms, we are able to operate the vast majority of our cases on a contingent (‘no win no fee’) basis.

Because professional negligence cases are intricate and require specialist knowledge, we offer a free, no obligation, and confidential advice service to all our new clients.

Press

To view our press coverage regarding tax avoidance schemes, please follow the below links our visit our Press Centre