Explaining Ltd, PAYE & Umbrella

Contract Options

There are a number of options to choose from when you contract with Alexander Associates:

  1. Limited company - tax efficient, usually the choice for professional contractors
  2. PAYE - added to Alexander Associates payroll, all the salary administration is done for you free of charge
  3. Umbrella company - same as PAYE, managed through a 3rd party umbrella company who manage the administration for a fee

Agency Regulations - What They Are

The Conduct of Employment Agencies and Employment Business Regulations 2003 were introduced to protect the rights of work seekers, hirers, employers and the recruitment industry. In summary it primarily covers that an agency cannot charge you a fee to find you work, must pay you for the hours you have worked and must confirm the following in writing before any work assignment:

  • The identity of the hirer and location
  • Start date and likely duration
  • Type of work including the experience, training and qualifications required
  • Hours of work
  • Rate of pay and applicable expenses
  • Any health and safety risks

If you are a Limited Company contractor, the Regulations allow you to "Opt-Out". Opting out allows you to continue contracting in the same way as prior to the Regulations, but can raise issues which conflict with the spirit of IR35, the UK’s anti-avoidance tax legislation. Legislation around IR35 is ever changing. If you are not familiar with the many aspects of this then speak to one of our consultants, all of whom are fully conversant with the latest implications of IR35. However, for more complex queries or issues, Alexander Associates can offer you the expert advice of our own tax specialists. As the legislation changes, Alexander Associates will keep you fully up-to-date with the many nuances that may have an impact on your status. This will be through newsletters, one-to-one conversations and workshops.

The Benefits

  • Pay

We offer excellent hourly and daily rates of pay. Alexander Associates operate an open book approach with their clients and contract workers - we have nothing to hide. You choose whether you are paid on a monthly or weekly basis. Just let us know at the beginning of your assignment.

  • Holiday Pay

An amendment to the European Working Time Regulations (WTR) ensures that workers get and take paid holiday. PAYE contractors are entitled to 28 days paid leave per leave year (0.603 days per week), inclusive of bank and public holidays. Contractors accrue holiday pay of 12.07% of their hourly rate for each hour worked. Holiday pay accrued will be displayed on payslips as "Holiday Days Accrued" and "Holiday Pay Accrued". If you wish to know more detail about this and all the terms and conditions then please contact either your consultant or email Angie@alexander-assoc.co.uk. Work out your holiday entitlement at https://www.gov.uk/calculate-your-holiday-entitlement

  • Pension

All employers including agencies must offer an auto-enrolment compliant pension scheme by law. A pension is a way of saving for your retirement. You, your employer and the government pay into your pension. A percentage of your pay is put into the pension scheme automatically every payday - currently, a minimum of 3% but this minimum will increase to 5% from 6 April 2019. Alexander Associates currently contributes a further 2% of your pay (3% from 6 April 2019) and the government gives you tax relief automatically. You may choose to opt out of the auto-enrolment pension - that is your personal choice and depends entirely on your individual circumstances. However, if you wish to do this you must contact the pension scheme provider directly.


Contact us

01959 562572

4 The Old Yard
Rectory Lane
Westerham ,Kent
TN16 1JP

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