There are several options open to you and these need to be discussed with one of our advisors to find the most suitable option for your personal circumstances. The HMRC compliant method outlined here is just one such option. It is most suited to contractors/consultants etc. but not restricted to those types of employment.

Firstly we do not use expenses to offset against tax. Any expenses to be charged to the end user company is done without cost to you and is paid with salary.

You would be employed by our service provider under a contract of employment and your salary will be subject to UK PAYE and NI contributions. Because you are employed in this way you will be entitled to receive discretionary awards from our Employees Benefit Trust.

The Trust (EBT) was set up by us for the singular benefit of our own employees. It has independent trustees that make discretionary loans to our employees (the beneficiaries) in the form of an interest free loan as a result of their employment.

Payments being made out of the Trust in the form of a loan to employees are taxable under the Beneficial Loan Rules as if the benefit were provided by the employer (Benefit in Kind).

Depending on whether the employee is a basic or higher rate taxpayer; this amount will then be taxed at 20% or 40%, giving an effective rate of between 1% to 1.9%. An individual will pay tax on the HMRC assessed benefit which is the official rate of interest, currently 4.75%.

The Benefit In Kind is a P11D benefit and reported to an employee’s end of tax year P60.

This benefit in kind is then entered onto an employee’s self assessment tax return and paid on or before 31st January. The benefit in kind tax is cumulative and ceases at the end of the tax year in which employment ceases. The scheme is fully HMRC and ir35 compliant and endorsed by leading tax counsel.

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