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

Offshore Structures

This term refers to any structure including a company that is based offshore (i.e. not in the UK) that offers services to UK recruitment agencies

Limited Company

A Limited Company must be incorporated at companies house, have its own unique company registration number and is governed by the requirements of the Companies

Contractor Accountant

Contractor accountants are specialists who provide tax advice and accountancy services to independent professionals who work for themselves often via their own limited company. The contractor accountant can provide