The Finance Bill 2014 radically changes the framework for the entire supply chain of temporary workers.
From April 6th 2014, the new Onshore Employment Intermediaries: False Self-employment Legislation will mean that many contractors will be unable to continue working as ‘self-employed’ through their Employment Agency.
The chancellor has targeted increased revenues of £500m in the first year from this, largely from Employer’s NI and HMRC have made it very clear that they will be approaching this with a zero tolerance approach. As of April 2015, there will also be a new requirement for all intermediaries and recruitment agencies to keep records (and complete quarterly ret urns) of any workers for whom tax or NI has not been deducted, the reason why the deductions we re deemed unnecessary and to make these available to HMRC as required.
What does it mean for me?
In order to maintain our total compliance, it is unavoidable that we have to change the way in which we work and how we employ our temporary workers. In the majority of cases, we will be able to continue supplying you without any change in rates, however for unskilled labourers and other operatives where there is clear Direction and Control from you the end user, there are no alternatives other than to raise the rates in order that the entire supply chain remains compliant.
We have already heard of some agencies trying to profiteer from this by trying to increase rates by 20-30% and would like to reassure you that for the vast majority of cases, the increases will be significantly lower than this.
I’ll be in touch over the next couple of days to speak to you personally about any potential changes to the rates that we charge you. If you have any questions in the meantime, please don’t hesitate to get in touch.
For more information on the new legislation, please visit: www.gov.uk/government/consultations/onshore-employment-intermediaries-false-self-employment