Alternatively we may ask you to complete a special form giving details of the income and outgoings from the business. Not necessarily, if you have been in business for less than a year or your gross profit is small we will not insist on certified accounts.
We do, however, reserve the right to ask for sufficient, alternative, information to allow us to calculate your self-employed earnings.
Many companies have been accused of abusing gross ups.
Let's take a look at a few high profile companies that have had their gross up practices make the news: The Bottom Line When perusing a company's proxy statement and/or analyzing an executive's pay - be sure to read the footnotes.
That is, boards would simply compensate their executives so that any taxes they incurred upon a change in control would be covered.
Over the years, this compensation practice expanded to cover taxes that senior executives incurred on many other sources of income (including perks).
That's because details regarding gross up compensation is typically buried in the footnotes of the company's proxy statement.
(Find out more in Also because gross up pay is related to taxes (and doesn't appear to be a brazen perk like a country club membership) it seems that the investment community largely overlooked it.
However, the practice of offering gross ups didn't really become popular until the late '90s and early '00s.
That's because employee stock options (ESOs) were the preferred method of lining executives' pockets. Stock options were a form of potentially vast compensation that could be realized over a short period of time - typically a couple of years.
Upping the Gross Pay Given that an executive's salary, bonuses and options pay has historically received so much scrutiny, gross up compensation seemed like a terrific answer.