Stop notice 2

Arrangement details

Scheme Users enter into an employment contract (‘the Employment Contract’) with Saxonside Limited. The Employment Contract stipulates that the employee will work on client assignments and in so doing will become an employee of Saxonside Limited. In relation to payment, it states that Saxonside Limited will pay the employee (ie, the Scheme User) at least the National Minimum Wage (NMW).; At the same time, Scheme Users enter into an agreement to grant an option (‘the Option Grant Agreement’) with Saxonside Limited. This is the preliminary agreement under which Scheme Users (called ‘the Grantor’ in the agreement) undertake to grant an option which, if exercised, requires the Grantor to enter into an annuity agreement in which Saxonside Limited (‘the Grantee’) is the annuitant and the Grantor is the obligor. The Grantor is not permitted to assign any rights or obligations under the agreement without Saxonside Limited’s consent. On the other hand, Saxonside Limited has full discretion to assign all or part of its rights under the Option Grant Agreement without the consent of the Grantor. The Grantor would become required to grant the option only after receiving a ‘further consideration’ of £1000 from Saxonside Limited. As the Grantee, Saxonside Limited agrees to make payments to the Grantor as consideration for receipt of the grant. These payments are claimed to be capital payments as a result of this agreement and are not made subject to deductions of tax orNICs.; The annuity agreement (‘the Annuity Agreement’) users will enter into with Saxonside Limited is contained within schedule 2 of the Option Grant Agreement. The Annuity Agreement records the terms of the deferred private annuity contract, which is the subject of the Option Grant Agreement, as agreed between the parties. The Annuity Agreement records that the yearly calculation for payments will be determined by the formula set out in the agreement. The agreement stipulates that ‘such payments will commence on the first day of January 2035 and will continue to be paid annually on this date for the life of the obligor’.; Saxonside Limited invoices the recruitment agency or end client for the services carried out by the Scheme Users based on the hours worked and the appropriate hourly rate.; Saxonside Limited receives the funds for the services carried out by Scheme Users from the recruitment agencies or end clients.; The amount that each Scheme User is entitled to be paid is confirmed in the Employment Contract as being in line with theNMW. This is paid by Saxonside Limited in line with theNMWhourly rate. This is confirmed by the payslips and the bank statements of Scheme Users.; Saxonside Limited withholds and retains a percentage, being approximately 20% of the amount invoiced to the recruitment agency or end client for the services carried out by Scheme Users (‘the gross contract value’). It then pays the balance, after the payment ofNMW, as payment for the grant of an option to Scheme Users (see 8 below). This balance is confirmed in a notification issued by Saxonside Limited to Scheme Users (the ‘Option Grant Note’).; Saxonside Limited makes a second payment to Scheme Users called the ‘Grantee’s Payment’, as referred to in the Option Grant Agreement and Annuity Agreement. These are evidenced in the Option Grant Notes as well as the Scheme Users’ bank statements which show an aggregate total in accordance with the net salary per the payroll and the second payment noted on the Option Grant Note from Saxonside Limited the same day. These are paid in one aggregate payment. The second element of the payment is made without deductions of tax andNICs.; The Grantee payments that Saxonside Limited makes to Scheme Users are claimed not to be subject to Income Tax or National Insurance contributions.