None EBT Scheme - Smart Ventures

[AVFC]

I have a company called Smart Ventures contacting me saying that their scheme using an annuity does not come under the type of DR schemes captured in the 2019 LC. For anyone else getting the calls the persons are and woman called Emily and a man called Dave who work for this lot.

Are there any views on here whether or not they correct even though I am not tempted near them.

[cojak]

I didn't expect to have to point people to this thread these days, but read this first:

If you are tempting to join a new contractor scheme, ask the following questions

[Iliketax]

I have a company called Smart Ventures contacting me saying that their scheme using an annuity does not come under the type of DR schemes captured in the 2019 LC. For anyone else getting the calls the persons are and woman called Emily and a man called Dave who work for this lot.

Are there any views on here whether or not they correct even though I am not tempted near them.

In the real world, an annuity is a regular payment of money. I have no idea what "annuity" means under this scheme so let's focus on the cash.

Who pays the cash? If the employer, then you are taxed to PAYE/NIC on it (as normal employment income). If someone other than your employer, then you are taxed to PAYE/NIC on it (as normal employment income or under the disguised remuneration rules). If you are self-employed, then you are taxed as normal trading income and NIC (either because it increases your profits or because of the self-employed disguised remuneration - whoever paid "Smart Ventures" for your services will have made a qualifying third party payment).

[webberg]

In the real world, a contractor working at and end client would usually do so via an agency.

So the cash flow might be end client > agency > PSC > contractor.

Are you suggesting that because the cash started at the end client and that entity might be seen as making a "third party payment" then the whole transaction gets caught in the DR legislation.

Or have I completely misunderstood that - in which case my apologies.

[WTFH]

Let's see...
Smart Ventures. Seems OK to start.

Odd that their website is designed in Malta.
And that the website owner details are missing at Nominet.

Probably nothing to worry about, I mean they say they are above board so they must be. Right?

[kentishlad]

Ive learned to fear anything that has a word preceded by the word 'Smart'

Smart Pay
Smart Ventures
Smart Motorways

All designed to hit you hard in the pocket eventually (allegedly)

[Iliketax]

In the real world, a contractor working at and end client would usually do so via an agency.

So the cash flow might be end client > agency > PSC > contractor.

Are you suggesting that because the cash started at the end client and that entity might be seen as making a "third party payment" then the whole transaction gets caught in the DR legislation.

If we are talking about self-employed DR then yes.

Self-employed DR requires there to be a qualifying third party payment and a link to the relevant benefit (Condition D). A third party payment is a payment to anyone other that to the individual. But a loan to the individual trader could never be a third party payment (and so could not be a qualifying third party payment). So by itself a stand up comedian who gets a loan from the gig promoter would not be caught which goes against the policy objectives of the legislation. But the gig promoter got a load of cash from the audience and that would be a third party payment as it allows the loan to be made. It relates to the services that the comedian provides and so would be qualifying under the trade connection condition.

Julia, if you are reading is there any chance of HMRC's guidance please?

If we are talking employee DR then there is no concept of a qualifying third party payment, you just need a payment that is in connection with your employment and (for example) a payment made by a relevant third person to a relevant person. If you are talking close companies' gateway then there needs to be a relevant transaction by B (and (for example) a payment made by a relevant third person to a relevant person). There is no concept of a qualifying third party payment.

[webberg]

Thank you.

I need to digest that a bit before responding.

[DontSettle]

Julia, if you are reading is there any chance of HMRC's guidance please?