So let’s get straight to the point. The Holiday Extra Group are in the Paradise Papers.
In 2005 Gerry and Carole Pack, (pictured) the founders and owners of Holiday Extras, sold a 37 per cent stake in the business to a senior management team. Mr & Mrs Pack pocketed £24 million by selling the stake in their company to its management according to the Daily Telegraph
In the latest set of accounts lodged at Companies House on the 5th Jan 2017, Holiday Extras Investments Ltd, made a loss of £2.4 million. In the previous years accounts they made a £6.6 million pound profit.
Now Holiday Extras set up an Employee Benefit Trust (EBT) to ensure that ALL employees within the Holiday Extras Group benefit from the continuing development of the business and provide a market for those shares held by employees leaving the employment of the group.
As is clear in the first picture above Appleby Trust (Jersey) Ltd is the independent trustee of the Holiday Extra EBT.
So What is an Employee Benefit Trust? Well according to the Financial Times:
Employee benefit trusts have been used as a mechanism for companies to pay high earners in a tax-efficient manner. The employer deposits money into an offshore trust for the benefit of employees, or their families, who receive payment through tax-free loans. This process can allow employees to postpone — or completely avoid — paying income tax or national insurance contributions.
The rules surrounding EBT’s have recently changed after a long running legal case between HMRC and Rangers Football Club
As of the 31st March 2016 the Holiday Extras Investments Employee Benefit Trust held 1.6 million ordinary shares £0.10 in Holiday Extras Investments Ltd.
Certain staff, the accounts say, but do not make clear who, have been granted share options totalling 130,640.
Holiday Extras Investments Limited paid a dividend of £2.8 million to the shareholders of the company according to the latest accounts lodged at Companies House on the 5th Jan 2017.
The company is controlled by Gerry & Carole Pack and their two sons Matthew & Jeremy, directors of the company, by virtue of their shareholding
So we’d like to know if the ordinary worker at Holiday Extras in Newingreen have benefited from the EBT? What do you think?
The Shepwayvox Team
There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any people, companies or other entities included in this blogpost have broken the law or otherwise acted improperly.