During the early noughties the use of employee benefit trusts (EBTs) to pay high earners was popularised by thousands of companies, in fact 6,500 according to HMRC. EBTs involve the employer company setting up a trust which then pays out a loan to the employees enabling the employee to minimise their tax liability. In a lot of cases the loan is not required to be repaid for a considerable length of time, in some cases not until 100 years has elapsed. Needless to say HMRC took exception to this form of tax avoidance and in 2011 launched the EBT settlement opportunity, inviting employers, companies and other users of these arrangements to settle tax and NIC without recourse to litigation. This coincided with the disguised remuneration legislation, which took effect from 6 April 2011 and, in some cases, applied to transactions that took place on and after 9 December 2010. Click here to read more Written by Andy Vessey for contractorweekly.com