Contracting in Germany

I've got the possibility of working in Germany for 6-12 months, but as most readers probably know, I would have to work through a management company. IMO these things are a rip-off, but they do have contractors over a barrel.

I've been contacted by one such management company, ITECS of Rotterdam, who sent me some details. The scheme it proposes looks pricey to me; it involves an Employee Benefit Trust, which is charged at 5%. Money is locked away in this trust (off-shore, Guernsey, operated by Royal Bank of Canada) for three months at a time and cannot be touched, in order to avoid German (and UK) tax.

Below are the questions I have asked, together with some of the answers.

Q: How can you claim that money held in the EBT is 'tax-free'?

A: Money is held in a 'tax-haven', in this case Guernsey.

Q: What is RBC doing for its 5% per month?

A: Naff all! I am paying 5% per month for the honour of tax-free money.

Q: What kind of growth can this trust fund expect to achieve, especially in depressed stock markets all over the world?

A: The trust is not an investment; it doesn't even earn interest.

Q: Wouldn't I have to declare the EBT income on my UK tax return, thus making it liable for UK Income Tax?

A: ???

This last question bugs me the most. I cannot believe that I do not have to declare this money, and that it is not liable to UK tax.

It looks too good to be true, so it probably is!

Pete