Stop notice 24

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 National Minimum Wage (NMW) rate or the National Living Wage (NLW) rate if applicable. Para 3.12 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 employee 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, wherePAYEandNICsare accounted for. On the same day, the contractor will receive an Advanced amount together with the basic pay amount. This amount does not get accounted for tax andNICsbut is included in the single payment received by the user in their bank account.