Is your current employment agency supplier fully compliant with the new regulations regarding temporary workers pay?

14-Apr-15
Is your current employment agency supplier fully compliant with the new regulations regarding temporary workers pay?

What’s happening?

·        HMRC has recently announced new reporting requirements for employment agencies effective from 6th April 2015. In short, unless payment to their contractors is made via standard agency PAYE, Agencies must now submit additional information to HMRC. This includes, without limitation, payments made to Personal Service Companies, Umbrellas and Consultancies etc.

Why have these changes been brought in by HMRC?

  • Thousands of UK based temporary workers are currently employed by their agencies using either onshore or offshore intermediaries including umbrella payroll companies. Increasing numbers of employment agencies are using employment intermediaries to disguise employed temporary workers as self-employed. The main reason for doing this is to avoid the employment agency being obliged to pay 13.8 per cent employer National Insurance Contributions (NICs), administer PAYE and provide other statutory employment rights to their temporary workers.
  • The Government is changing the way they determine whether someone is self-employed for tax purposes. This legislation takes precedence over the Construction Industry Scheme (CIS), Managed Service Company (MSC) and IR35 legislation and is an attempt to reclaim some of the £500million the government estimates it is losing annually to “false self-employment” contracts.
  • Under the new law, if you as the end hirer exercise supervision, direction or control over the workers your agency partners supply, those workers will be deemed “employed” for tax purposes, and full employee NICs, employer NICs and income tax will have to be paid on those workers. The same applies if the terms you agree with your agency include an overarching clause asserting your “right of” supervision, direction or control over the workers supplied, even if that right is not exercised in practice.

Please read our blog The Tax Office Investigates the British Recruitment Industry http://cushillo.wordpress.com/2014/05/22/the-tax-office-investigates-the-british-recruitment-industry/

More details on the new regulations can be found on the Recruitment and Employment Confederation website.

https://www.rec.uk.com/legal-resources/legal-guide/PAYE-and-NICs#202344

Cushillo Personnel has always believed passionately in providing professional and ethical recruitment services. We have never used an umbrella or intermediary company and we ALWAYS ensure our temporary workers receive full payment including holiday pay, sickness pay and all other statutory benefits.

I would encourage all employers of temporary staff to check with their current agency supplier which payment model they currently operate for their temporary workers. Check if they operate their payroll via an intermediary or umbrella payroll company? Do they currently pay NI contributions and Holiday pay to their temporary staff? Are they also entitled to other statutory benefits such as SSP? 

Your company brand and reputation surely is of the most importance and by working with a professional company such as Cushillo Personnel who treat all their temporary workers fairly & ethically by making sure all statutory payments are paid to its temporary workforce and also to HMRC, we can help protect your company brand and image.  

If you have any further questions or you would like to discuss how working with our company can help raise recruitment standards within your company, please do not hesitate to contact us.

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