This email was sent to me by the contract manager from Umbrella company before I was sent the contracts to sign. I don't know if there any any implications here but there is no mention of loan payments here. The contract itself which is 24 pages long mentions the loan part on page 19 in a small section.
"In terms of how this is calculated, there are 2 elements that the contractor can benefit from:
1. A salary portion (NMW) which is where the PAYE & NI are deducted.
2. The option as an employee to apply for a tax free element from his employer at a commercial rate of interest (a traditional Umbrella company will describe the difference as expenses and commission where as a Ltd Company will use a dividend option which attracts corporation tax)
The 2nd portion is a payment which is treated differently under the BIK rules and accordingly is not classed as employment income or revenue and is therefore accounted for in a different way.
We take care of tax, NI, P45 etc as the employer.
Benefits include:
• Fully employed status
• Fully compliant
· Same day payments
• £10 million Employers Liability Insurance
• £5 million Public & Products Liability Insurance
• £2 million Professional indemnity Insurance
• No expenses to collate and submit, Not expense dependant
• No tedious admin
• Outside IR35
• Outside MSC
• Dedicated account manager
• No fees when not working
• Immediate payment weekly or monthly – depending on agency/end client instructions
We manage your tax and NI so you wouldn't need to worry about that and we will send you a payslip on a weekly basis which covers your salary amount for the period worked."
"In terms of how this is calculated, there are 2 elements that the contractor can benefit from:
1. A salary portion (NMW) which is where the PAYE & NI are deducted.
2. The option as an employee to apply for a tax free element from his employer at a commercial rate of interest (a traditional Umbrella company will describe the difference as expenses and commission where as a Ltd Company will use a dividend option which attracts corporation tax)
The 2nd portion is a payment which is treated differently under the BIK rules and accordingly is not classed as employment income or revenue and is therefore accounted for in a different way.
We take care of tax, NI, P45 etc as the employer.
Benefits include:
• Fully employed status
• Fully compliant
· Same day payments
• £10 million Employers Liability Insurance
• £5 million Public & Products Liability Insurance
• £2 million Professional indemnity Insurance
• No expenses to collate and submit, Not expense dependant
• No tedious admin
• Outside IR35
• Outside MSC
• Dedicated account manager
• No fees when not working
• Immediate payment weekly or monthly – depending on agency/end client instructions
We manage your tax and NI so you wouldn't need to worry about that and we will send you a payslip on a weekly basis which covers your salary amount for the period worked."
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