lOOKING TO PICK YOUR BRAINS...ABOUT AN EBT....

welshsheep

OK, a bit long winded, but in need of advise....

We are looking to move, nut are having an issue as we are self employed......

We are self employed and have an accountant, we dont take wages with the exception of 500 per month, each, we take dividends thereafter.....on our ear end accounts these do not show as a true value.......basically less that we actually get...

when the morgage advisor looked over our accounts it showed that year on year we have year end accounts that go down, this in itself was ok, until last yeats accounts shows us going down quite a bit, as we took out an EBT.....as a corporate tax thing, we actually took home alot more....the underwritters are struggling with this and wont give us a quick descission....any advice out there? PLease.......dont know what to do.....the other mortgage company - Halifax has also sent use to the under writters on a bad credit score, basically I was ill for three months, and unfortunately two accounts had later payments on them....this has had an adverse effect on my mortgage application, I have negotiated with the companies and asked them if I pay off the ammounts left on the account with they take off the late payments, which they have agreed too.....how long does this take to show up on your credit reference?

oh joy.........its never easy xx

TYIA

Clare x

welshsheep

Oh btw.....halifax agreed to my mortgage and then when the application went in turned it down based on credit ......which did not change from when they agreed it....and seeing as now I have paid them off...i dont get it? We have appealed.....an waiting outcome x

Leon_W

My inclination would be that they are just saying they will amend the credit file to get you to pay. Legally they cannot change it, if you were late in paying then that is what has to be recorded. They cannot rewrite history.

welshsheep

Hi there thanks for the reply, when I spoke to experian they said that they could, and that "negotiation " is what the Experian person advised....x

kingstreet

Are you self-employed and Schedule D taxpayers, taking drawings and having a net profit you declare to HMRC each year, or are you Directors of a Limited Company, taking a salary and paying tax through Schedule E and the PAYE system?

And can you clarify what you are calling an EBT? Do you mean the Employee Benefit Trust which made employees out of the self-employed to allow them to use dividends as a way of escaping NI on a portion of their incomes and other tax-avoidance measures?

What exactly shows on your credit files? Have you asked each of the three CRAs to send you your files so you can check the entries?

Jenniefour

Press spam on above, folks.

Done, thanks mods.

welshsheep

Hi there, was does press spam mean?

Clare

welshsheep

Are you self-employed and Schedule D taxpayers, taking drawings and having a net profit you declare to HMRC each year, or are you Directors of a Limited Company, taking a salary and paying tax through Schedule E and the PAYE system?

Yes we are self emplied and taking drawings....

And can you clarify what you are calling an EBT? Do you mean the Employee Benefit Trust which made employees out of the self-employed to allow them to use dividends as a way of escaping NI on a portion of their incomes and other tax-avoidance measures?


You got it right with the EBT....we paid ourselved it and then used it

What exactly shows on your credit files? Have you asked each of the three CRAs to send you your files so you can check the entries?

I have contacted the companies to do with late payments, I was ill, I did thnk that I had moved them to a direct debit....anyho, they are up to date, and two of them are paid off....

Any help would be great xxx

kingstreet

You need to establish what EXACTLY is on your credit files so you can tell any potential lender EXACTLY what problems you might have had. If you say nothing and they find something it's an automatic decline.

Get your credit files. Deal with the issues raised on them. Don't rely on providers saying they've done something without checking the results.

I'm sorry, I know very little about this EBT lark, but I was sure you had to become employees to take advantage. It would mean setting up a limited company first. Maybe there are others who can tell you more...?

Thrugelmir

kingstreet wrote: »

I'm sorry, I know very little about this EBT lark, but I was sure you had to become employees to take advantage. It would mean setting up a limited company first. Maybe there are others who can tell you more...?

This may have a bearing on attitude of the underwriters.

EBT Loophole to Close

In the March 2010 budget, the government showed its commitment to putting a stop to tax avoidance schemes by 06th April 2011.
A press notice, “Protecting Tax Revenues”, which announced attacks on payroll and offshore "schemes" that exploit tax "loopholes “ was released alongside the Budget statement.

The notice from Her Majesty's Treasury reads as follows: "The government is taking further action to change the game for those seeking to bend or break the rules on tax."

According to the notice, the government says it will take action on trusts and "other vehicles", used to reward employees, where remuneration is not taxed correctly.

Anyone currently using or considering using a scheme that promises “a higher net return” should be wary as HMR&C have successfully applied retrospective tax action following the recent BN66 legal battle.

whoareya

Wow. OP - I am in EXACTLY the same situation.

I went to a broker who agreed the mortgage in principle. Found a house, had the offer accepted. Then went to the next step and Halifax declined my application, with no reason.

Halifax have seen my credit rating and it was fine about 2 months ago. I have done nothing since to affect my rating. Then just yesterday was told it was declined.

I am gutted.

My broker is going through lots of lenders and it's all about this EBT scheme they are having difficulty with.

Completely at a loss. I have 25-30% to put down on a house the mortgage would only be approx £200k and repayments about the same as what I am paying rent at present. Unbelievable.