Glossary

PAYE

Meaning ‘Pay As You Earn’, this term refers to the method of paying Income Tax and National Insurance Contributions (“NICs”) in the UK.

Your employer will deduct and pay your taxes to HMRC ‘as you earn’, i.e. with each payment your employer makes to you.

Where we refer to PAYE in the recruitment sector, often it refers to working as an employee of the agency, where the agency pays you directly for the work you undertake.

If engaged by a compliant umbrella company, the payments you receive will also be paid under PAYE, however, the assignment rate paid to the umbrella company by the agency should be increased in order for the umbrella to account for the employment costs it incurs, which the agency would pay directly if it employed you.

Other common terms

IR35

IR35 also known as the “intermediaries legislation”. This piece of legislation to is designed to prevent tax avoidance for any contractor working for an end-hirer

Umbrella Company

Umbrella companies employ contractors under the terms of a permanent contract of employment, meaning that the individual receives all 84 statutory rights and employment benefits

FCSA Charter

The FCSA Charter sets out the minimum ethical standards and levels of conduct expected from the Freelancer & Contractor Services Association (FCSA) Accredited Members. All