Stop notice 9

Arrangement details

Scheme Users enter into contracts of employment with Company X. The contract stipulates at clause 3.1.1, that the contractor will receive National Minimum Wage (NMW) or National Living Wage (NLW) if applicable.; Scheme Users also enter into an Option Agreement with Company X. In the agreement, Company X agree to pay the Scheme User and in return they grant Company X the right to oblige Company X and them to enter into an annuity agreement. Entering into the annuity contract is conditional upon various criteria being met.; Company X then enter into contracts for services with end clients or agencies for the provision of the Scheme Users’ services.; End clients/Agencies pay Company X for the provision of the Scheme Users’ services based on timesheets completed.; In line with the contract of employment, the Scheme Users are paidNMW/NLW. The amounts are calculated based on hours worked per timesheets. Evidence obtained confirm payments appear to be made from Company X to the Scheme Users, but the amounts paid exceed theNMW/NLWpay shown on the payslips.; HMRCunderstand that the additional amount paid is said to be payments under the Option Agreement. The amounts are said to be investments and are therefore not subject toPAYEdespite the overall amount being a relative percentage of the Scheme User’s gross contract value.