Our solution is registered with HMRC in the UK in respect of PAYE. You are paid for the hours worked on the contracts in which you are placed, usually at 15% of gross contract value or £5.60 per hour, whichever is the greater. This pay is then subject to PAYE and NICS.
The remainder of the contract value becomes the turnover of our consultancy supply operation, and as such the revenues obtained are available to the company for settlement into the Employee Benefit Trust.
When you are accepted for employment with our Employee Benefit Trust, you will by virtue of that employment become entitled to benefit in turn (at the Trustees discretion) as a beneficiary of the Employee Benefit Trust.
The Trustees of the Employee Benefit Trust are then empowered to make loans to its Employees; such loans are assessed by HMRC as benefits in kind at a rate of 6.25%, this value is then in turn assessed for tax purposes at a rate of 22% or 40% (this gives an effective tax rate on the loan amount of between 1.3% and 2.2%).
The loans paid by the Employee Benefit Trust are the mechanism that provide for your enhanced net income retention.
Salary is calculated, and loans are made on a monthly basis, therefore effectively the Employee Benefit Trust only has access to funds equal to one month salary at any one time.
The delay between invoice and payment is minimal compared to an Umbrella Company solution.
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