Contractor
| Q | Is Manximum-Pay legal? |
| A | Yes - Manximum-Pay works entirely within UK & Isle of Man law, the solution is totally legal. Contractors pay their tax and NI due by way of a self assessment tax return as legitimately self employed individuals. |
| Q | Is Manximum-Pay an employment agency? |
| A | No. Manximum-Pay is not an employment agency does not recruit on behalf of clients nor does it find work for contractors/freelancers. |
| Q | National Insurance Contributions, do I pay Employees and Employers? |
| A | No - Self employed people pay reduced Class 2 National Insurance contributions of £2.30 per week. In addition, if their taxable income is above a certain figure they will pay Class 4 contributions. There is no liability for employers´ NIC |
| Q | Tax, am I responsible for my own Tax, and how much do I pay? |
| A | Yes –As a self employed individual you are solely responsible for paying your tax and National Insurance contributions, being self employed makes a big difference to your tax affairs. A self-employed person is taxed completely differently from an employee. Their income for tax purposes is the difference between their total income less proper business expenses. This is declared to HM Revenue and Customs on what is known as the self-assessment tax return. This will determine how much tax you pay. |
| Q | Is Manximum-Pay a tax avoidance scheme as far as HMRC is concerned? |
| A | No, the structure conforms to all of the relevant tax rules and will reduce each contractor’s tax liability substantially. The contractor must complete their self assessment form and submit this to HMRC in due time. Manximum-Pay conforms to all HMRC legislation. |
| Q | Expenses, what can I claim? |
| A | You can offset business expenses against income. You are entitled to reduce your Tax liability by claiming expenses incurred wholly and exclusively in the necessary performance of your business. Manximum-Pay will email guidelines to help you identify the various expenses you can claim in relation to carrying out your business. |
| Q | Self Employed how do I register? |
| A | Contractors must register as self-employed with HMRC within 3 months of working through Manximum-Pay. You can register by telephone, the HMRC helpline for the newly self employed is 0845 915 4515 or my internet – there is an HMRC link on the ‘sign up page’. Contractors must also register for VAT if their turnover is greater than £65,000 per annum. |
| Q | Offshore Company, my agency has a policy of not dealing with offshore companies, what can I do? |
| A | Mistakenly, some agencies have assumed they might be in breach of legislation because Manximum-Pay is Isle of Man (IOM) based. Managed Service Company (MSC) legislation (April 2007) and the 3rd Party Debt Transference legislation (effective from Jan 2008) mean that agencies are now liable for unpaid tax and NI contributions. As a result, they are rightly undertaking due diligence to ensure that they are not at risk. Once agencies understand that Manximum-Pay is not an MSC and there will be no risk of 3rd party debt transference, they are happy to begin working with us. The legislation targets companies which provide schemes for contractors to evade tax. Every agency exposes itself to HMRC penalties and accrued interest for each and every one of their contractors who evade tax payments. Avoid risk – Manximum-Pay is an intermediary limited company therefore contractors are considered by HMRC as being legitimately self employed in the UK. |
| Q | My agency’s self regulation states that I need to be a director or shareholder of a limited company that will be billing them for my services, how can I use Manximum-Pay? |
| A | Contractors do not need to be a director or have a controlling financial interest in any limited company that is billing an agency for their services which is not registered in the UK mainland. Manximum-Pay is not an MSC and functions only as an intermediary limited company therefore contractors are considered by HMRC as being legitimately self employed in the UK. Our contractors are not issued shares nor receive dividends to avoid paying National Insurance Contributions and regardless of the contract status, IR35 regulations do not apply. Agencies, during due diligence, should down load the appropriate company registration and VAT certification from our web site that conform to regulation. Any further regulation by the agency is self imposed. |
| Q | Is Manximum-Pay an Umbrella Scheme or Composite Company and do recent changes in tax legislation affecting such schemes come into effect? |
| A | No - Manximum-Pay is a self employment contracting service for clients to engage subcontractors, contractors and freelancers, who legitimately pay their own tax and National Insurance in the UK. Manximum-Pay does not provide Managed Service Companies - we engage subcontractors directly ourselves and, rather than abuse company “dividend” and “expense” concessions, our subcontractors properly pay the full rate of Tax and National Insurance ordained by Parliament for the Self Employed The legislation is directed towards complex contrived arrangements to avoid tax and National Insurance contributions, in particular the use of alphabet shares with little value or rights being used to pay dividends disguising remuneration to avoid tax and National Insurance. |
| Q | How does the contractor get paid and what are the costs? |
| A | The contractor/freelancer agrees with the client the amount of income due for work undertaken during the billing period. At the end of the (week/month/contract) period, the client or contractor submits an online billing request to the Manximum-Pay through the web site for the amount due to the contractor/freelancer. Manximum-Pay will immediately issue to the client or contractor an invoice for the same amount plus VAT. The client then pays this invoice by BACS transfer to the secure account of Manximum-Pay. On receipt of payment from the client, Manximum-Pay will make immediate payment by direct bank transfer for the equivalent amount due to the contractor/freelancer less a business charge of 5% margin (minimum £15.00) of the net value of the invoice before VAT. Confirmation of this payment will be emailed to the contractor/freelancer for their records. |
| Q | As a contractor, how quickly would I expect to receive payment? |
| A | Manximum-Pay will process all payments to contractors the same day of receipt of cleared funds from your client (see flow chart). Payments from Manximum-Pay are processed by standard BACS transfer and you should receive payment into your bank account in 3 - 5 working days. You can also opt to receive a same day transfer via CHAPS at a cost of £20. |
| Q | Do I need to process all my payments through Manximum-Pay? |
| A | No. the amount of payments processed through Manximum-Pay is at the discretion of the individual contractor, however, the more payments processed through Manximum-Pay, the more tax and NI will be saved. |
| Q | Do I need to have my agency/client sign up to Manximum-Pay? |
| A | Agencies/clients can register and administer an account for themselves, or the contractor can add clients via their own account. If the contractor is fully administrating for both sides, it will be the responsibility of the contractor to raise and dispatch invoices to the agency/client. |
| Q | To comply with employment agency regulations, what might an agency request to see from Manximum-Pay? |
| A | Agencies often wish to have a copy of Manximum-Pays certificate of incorporation and the VAT certificate. Agencies require proof and evidence that they are being invoiced for the work you do by a bona fide limited company that is permitted to conduct business in the UK. |
| Q | Can you help me open a bank account? |
| A | Yes. We have a arrangement with Lloyds TSB International Off-Shore who can provide accounts in £, $ or € as well as all usual banking service – multiple debit cards (one to send home?), telephone & internet banking etc. Full details are available on our website. |
| Q | What do I have to do to join? |
| A | Signing up for Manximum-Pay could not be easier! Simply complete, sign and fax to us the attached Contract for Services and Subcontractor Registration Form. Weekly thereafter you simply submit your work record to your agency or end-user for processing as usual. They will pay us and in 3 - 5 working days , you will receive by BACS the full sum with only our 5% margin (minimum £15.00) deduction. |
| Q | Do I have to sign a fixed term contract with Manximum-Pay? |
| A | No. There is no fixed term contract; the arrangement can be terminated at any time by the contractor |