1.How does the contract work?

  • You become our employee, with a view to doing a succession of assignments for various agencies / clients in the course of that employment.
    This will allow the location of each assignment to be treated by HMRC as a qualifying ‘temporary workplace’, provided you do not expect to work there for (and do not in fact work there for) longer than 2 years – and this in turn will allow us to reimburse your expenses in relation to travel to and from work, free of tax, out of the income you have generated for your department.
    If the conditions above are not met i.e. you expect to be at a workplace for 2 years or over or you do not intend or expect to carry out a succession of assignments throughout your employment with Contracting PLUS Services, you will still operate as our employee but you will not qualify for temporary workplace expenses.
  • We enter a contract with an agency or an end client, for you to do work for a client.
  • You do the work.
  • The agency or end client pays us a rate – the contract rate – to cover both payment to you for the work you have done, and all the costs related to your employment, such as employer’s NIC. This rate is therefore higher than you would expect to get if you were paid PAYE by the agency / end client, to allow for these additional costs. At this stage, the money we receive from the agency / end client represents the gross income of the department of the umbrella company that you represent. It has not yet become ‘your’ money.

2.What happens to the money?

  • We make provision for your basic pay at National Minimum Wage (‘NMW’).
  • We make provision for the Employer’s National Insurance relating to all payments (other than reimbursed expenses) that are to be made to you.
  • We set aside provision for your holiday pay (though, at your request, we may be willing to loan this to you, in advance of you actually taking holidays).
  • We set aside provision to reimburse your expenses (the amount of your taxable pay must be at least NMW – and so if reimbursing all your expenses would push your pay below that level, we would have to hold back some of your expenses claim, until a later period when there is sufficient money available).
  • What is left represents the profit of your department. This will be shared between us:
    - we may allocate you a Discretionary Profit Sharing Bonus (‘DPSB’).
    - we will retain an overhead.
    - any balance would be carried forwards.

3.What about your pay and expenses?

  • Your pay: Your basic pay, your DPSB, and any loans we may make in respect of your holiday pay and PBA together add up to your total taxable pay, and are shown as such on your payslip. These are paid, subject to PAYE and Employee’s National Insurance.
  • Your expenses: You are also reimbursed your expenses, without deduction of tax.
  • Each pay period, we send you not just a payslip, but also a statement, showing exactly what has happened to the money you have generated and we have received.

It may all sound complicated – but we ensure the process for you is simple!