Flexible Salary Arrangements

Flexible salary arrangements build reserves for your future salary and additional benefits. These have government approval to provide for statutory benefits including pension, holiday pay, maternity pay, sick pay and also for additional benefits which are paid subject to PAYE regulations.

Employees are not obliged by law to draw the maximum possible salary. There is government approval to defer potential salary to build reserves for holiday pay, sick pay and maternity pay. Umbrella companies do not yet provide these benefits.The only UK tax requirement is that all payments to you from your work on assignment must be subject to PAYE (ITEPA 2003). 

IR35 requires contractors to be in a payroll with a contract of employment. The end client has no liability for unpaid payroll taxes provided you are in a contractual payroll. You are compliant with IR35 because the Intermediaries Legislation cannot be applicable, as there is no intermediary. This is the same for consultancy firms, umbrella companies and all other employers. CM provides an indemnity for those who are uncertain of the legislation.

CM is the employer paid by the client. The contractor is the employee paid by CM. There is always a margin between the billing and pay rates. Employer and employee are free to agree the margin when an employment agency is not an intermediary in the chain to the end client.

Agency Worker Regulations (AWR) control the margin only when an agency is involved in the chain. AWR do not allow deferral for additional benefits, not even for statutory benefits.

The Wagestream plan is a government backed loan scheme for employees to access cash before pay day. It is used by the NHS and other employers. The CM flexible salary arrangement has government approval to access cash before pay day or to defer accepting pay until a later day.