Typically, a contractor in this setup is paid a very small salary, on which he or she pays tax and National Insurance contributions, but receives the majority of the salary in the form of a loan.

As well as being inherently risky, because the setup works on the basis that the business making the loan will never ask you to pay it back, the schemes fall foul of recent HMRC legislation. Moreover, should you find yourself being investigated, it is likely that you will be required to repay in full the amount of tax you believe you have ‘saved’ by choosing this route. Accounts Direct strongly recommends that you do not pursue this business option. Offshore schemes are legally dubious and you run a significant risk of running into trouble with the UK tax authorities.

Given that alternative – and fully legitimate – options are available which can reduce your tax bill very significantly, it would be unwise to choose to operate through an Offshore Employee Benefit trust.


I used to dread accounting month but the last 2 years have been utterly pain free because of this super lot! Efficient, professional, thorough and really dedicated to saving you money. The savings they made me more than paid for their services! Many thanks.

Ms Amy Dear, PAVMAY LTD

Accounts Direct helped reactivate the company, get books up to date and all formalities in order as it should be. I'm very happy with how they approached the challenge and came through all the way. Solution oriented, agile, available and fast. 

Mr. Tor Karstensen, NOVYTEC LIMITED

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