Stop notice 20

Arrangement details

A contractor having already obtained work via an agency or directly with an end client seeks an umbrella company to conduct their payroll, and therefore enters into a Contract of Employment with Company X. The contract states that wages will be at the National Minimum Wage (NMW) rate or the National Living Wage (NLW) rate if applicable. Para 3.8 onwards of the Contract of Employment explains that employees may receive ‘Ad hoc Advances’ and sets out the conditions for receiving these advances and repayment terms. A ‘pay advance’ is described as an amount accrued on account for time already worked and is specified to constitute a debt due from the employer to Company X.; Company X invoice the end client for the contractor’s services.; The payment for the services of the contractor is made by the end client/agency to Company X.; Company X then make a payment to the contractor. The contractor receives basic pay (theNMWorNLWrate), commission and holiday pay which is all included on the payslips andPAYEandNICsare accounted for. On the same day, the contractor will receive an Advance Advice which will include the amount of the advance received by the contractor. This amount does not get accounted for tax andNICsbut is included in the single payment received by the user into their bank account.