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EFRBS Settlement
Newsletter issue - December 2013
If you have used an "EFRBS" (employer financed retirement benefit scheme) since 2006, you should shortly expect to receive a letter from the Taxman. This will allow you to pay tax which may have been avoided by using the ERFBS.
Various versions of EFRBS have been used by companies to make contributions into a trust for employees, for which the company has claimed a deduction against its taxable profits. The employees apparently did not suffer a taxable benefit in respect of the money held within the trust on their behalf. The Taxman is firmly of the opinion that this combination of tax allowable cost, and tax free benefit, does not legally stack-up.
He is now writing to all companies known to have used an EFRBS to offer them the choice of:
a) giving up the tax deduction for the contribution made into the EFRBS, and any deduction claimed for professional fees connected with setting up the EFRBS; or
b) paying PAYE and NICS due on the amounts contributed to the EFRBS.
These options relate to contributions made to an EFRBS from 6 April 2006 onwards. Where additional tax is due for an earlier year, interest will also be payable. Option a) may cost less now but in the future when the funds are paid out of the EFRBS to employees, those payments will be subject to PAYE.
We need to discuss which option, if any, will suit your company, and whether you want to reject the Taxman's offer in favour of fighting your case through the courts.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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