Frequently Asked Questions
Q1:
Why is the Tekpay facility complex?
A: We
all prefer simple solutions but they do not always work. Due to
the complexity of UK tax legislation, the facility has been designed
in order that any problems associated with past cases and relevant anti
avoidance legislation have been taken into account. This necessarily
requires that some degree of complexity is present.
Q2: Does
the facility have a fixed term duration with any conditions attached?
A: No,
nor is there a minimum number of participants required for us to continue
to operate. We intend to continue to provide the facility whilst
it is in our employees best interests to do so.
Q3: Are
costs likely to vary?
A: The
costs are levied in order to cover administration and finance expenses.
There is no intention to subject participants to rising costs over which
they would have no control.
Q4: Is
there a minimum period that I have to commit to when becoming employed
by Tekpay?
A:No, although it would not be worthwhile for
either of us if you only intended to stay for a few weeks. We
however find that most employees, in the absence of unforeseen circumstances,
stay with us for a length of time which makes it beneficial for all
parties concerned.
Q5: What
happens if the contract on which I am presently working has some time
to run?
A: Contracts
should not be broken by yourself and the circumstances will have to
be considered on a case by case basis. Also it may mean that you
would not be able to join us immediately but at a later stage when a
new contract commences.
Q6: Will
the contract under which my services would be provided be acceptable?
A:The
customers/agency contracts, are perused and any detrimental clauses
are questioned. The contracts with clients or their agents will
only be signed if they have been perused and, in our view, found to
be reasonable. However, we cannot guarantee this and would make you
aware of any potential problems. We believe that some parties
just sign the relevant documentation without question and consider that
such practices would not be in your best interests.
Q7: Is
professional indemnity insurance required?
A: To
minimise any potential liabilities that could be levelled against the
Company for participants work, the company and each participant will
be covered by professional indemnity insurance arranged at no cost as
part of the benefits available to you. The cover is for £2m
in aggregate and there is a remote possibility that if, during a particular
year other claims have arisen some or all of that £2m, cover may
not be available to meet subsequent claims. This cover will be
reviewed and if it is felt appropriate to increase it due to the number
of participants this will be arranged.
However, in order to cover
the potentially huge claims that may be invoked by an end customer in
the advent of a failed/flawed project, any participant should take out
additional insurance cover should it be required or indeed should they
feel it necessary for their own peace of mind.
Public and Employers’
liability insurance is also provided at no cost to yourself.
Should participants wish to
take out insurance to assist them in funding the cost of defending any
tax investigations that may be undertaken by HM Revenue & Customs,
appropriate independent cover should be available at a cost of approximately
£100 per annum. If you require further details please contact
us at info@tekpay.com.
Q8: How
much money would be retained?
A: 15%
is usually retained within the discretionary trust, although upon receipt
of requests from beneficiaries, the trustees may make loans of amounts
over and above £5,000 that has been accumulated.
Q9: Do
I physically have to repay the loan granted to me whilst I am an employee and if so why?
A: Yes,
however shortly thereafter you should be granted a loan as an ex-employee
and there are methods of smoothing a way for this repayment to happen
which we will be happy to explain to you further.
Q10: Are
there any provisions for employing a spouse/partner?
A: No
– in order to maintain the integrity of the facility such a provision
is not available.
Q11: Some
arrangements involve part of the amounts paid to participants being
transferred directly into an offshore bank account to be withdrawn without
deduction of UK taxation at a later date.
A: For
employees who remain resident in the UK for tax purposes such arrangements
could assist in facilitating tax evasion. Our facility does not
involve making payments to participants’ offshore bank accounts
in circumstances which could give them the false impression that such
amounts are not chargeable to UK taxation. It is not our intention
to facilitate any breaches of UK legislation.
Q12: What
happens if I die?
A: If
you die whilst in our employ then a tax liability may result in respect
of the loans that have been granted to you. If you die after you
have left our employ and have repaid any loans granted to you whilst
you were an employee then there are not likely to be any adverse tax
consequences. Further information in this regard can be found
on the members area of our website under the title “What happens
if die?”.
Q13: What
would happen if the law changes?
A: We
would assess any implications and modify the facility as appropriate
as may be practically possible. If any immediate action is necessary
then steps will be taken to safeguard the best interests of our employees.
Q14: Are
any guarantees provided that the HM Revenue & Customs cannot challenge
the status of the income received by the participant with the result
that it suffers more tax and NI than has been suggested by the proposal?
A: We
cannot provide a guarantee that HM Revenue & Customs will not challenge
the proposal, however advice received indicates that discretionary trusts
may be used in appropriate circumstances.
Q15: Are
there any requirements for participants to take up financial products
facilitated by our Group such as health cover, pensions, professional
indemnity cover etc? If so, are the costs competitive?
A: As
mentioned above we are able to provide many benefits for you.
We can introduce providers of some other financial services and in particular
life assurance is recommended as it can have benefits upon a participants
death. If you are interested in life assurance cover we are able
to suggest BUPA or Birch Insurance, the former providing advantageous
terms to us. The members area of our website contains a link to
BUPA and the e-mail address at Birch Insurance is
info@birchinsurance.com.
Q16: If
I introduce the facility to a friend do I benefit?
A: Should
you recommend our facility to a third party, you are eligible to receive
a payment of £500 three months after they join us, provided that
they remain as a participant for at least three months and the value
of the contract under which they provide services is at least £70,000
per annum and a payment of £750 if the value of the contract is
at least £100,000 per annum.
Q17: Who
are the trustees and how do I contact them?
A: Tekpay
(UK) Limited (the Company) is incorporated in the United Kingdom.
The Trustees of the discretionary trust which will advance loans to
participants, is managed by a long established trust and company service
provider in Guernsey, owned and managed by qualified accountants and
licensed by the Guernsey Financial Services Commission. Guernsey
has one of the highest levels of financial regulation in the world,
in fact higher in certain areas than is the case in the United Kingdom.