Stop notice 1

Arrangement details

A contractor requires an umbrella company in order to enter a contract with an end client to provide their services and receive payments. In these arrangements the umbrella company is registered offshore (company A).; The contractor enters into an Employment Agreement with company A.; A UK company (company B) provides onshore support to the offshore umbrella company to facilitate the engaging of end clients and recruitment agencies.; The employee then undertakes work for the end client and submits timesheets either directly to company B or their agency who pass on the details to the company B. Company B invoice the end client for the work done and receive payment from the end client. The invoices sent to the end client reflect the agreed contract value for services of the contractor.; The contractor then receives a salary payment based on the National Minimum Wage rate which is made through the payroll and a second payment, an ‘advance’ which is not made through the payroll and not declared for tax andNICs. This payment was described to an employee as ‘an advance on a discretionary bonus which we have not yet determined, and is therefore non-taxable’.