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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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Ive been a sole trader for some years and paid full rates

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I've been a sole trader for some years and paid full rates of tax. I have been approached by a company which offers a system where I am contracted on the minimum wage and the balance of any income is paid as a loan from a Trust. Is this legal?
Hello,
HMRC warns of any scheme to avoid tax on income. Tax avoidance scheme promoters sold contractor loan schemes with a variety of different features but they all involved individuals signing an employment contract with an offshore company and receiving a large proportion of their income in the form of a 'loan' from their employer - either directly or through an intermediary.
I think you should be careful when accepting any contract if it is presented as a way to lessen your tax.
It would not be illegal but you would still need to report the amount as income.
Customer: replied 3 years ago.

From your answer there would appear to be no tax advantage to taking this approach on the basis that if I report the "Loan" as income it would still be liable for the full rate of tax. Is this correct?

That is correct unfortunately. HMRC would not see this as anything but income to you.
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