Redego is providing a framework for auditing compliance with the requirements of the regulations either by proving that the worker has similar or better terms than their equivalent permanent colleagues, or by showing that you or the worker is ‘out of scope’ of the regulations.

Where neither of the above options are practical or possible, we can offer workers a ‘Pay between assignments’ contract at no extra cost to them or yourselves.

Redego is also providing online calculators for temporary work agencies to use in determining equivalent pay rates for their workers.

We can also provide your workers with a free consultation to see if they would benefit by operating through their own Limited company via Tempo Accounting. The legislation specifically excludes contractor who are in business on their own account.

The legislation will be introduced in the Finance Bill 2011, and become effective from 6 April 2011 onwards. The inclusion of anti-forestalling measures that became effective on the 9th December 2010 mean that from now payments of this type fall within the scope of the new measures.

The proposed legislation states that sums earmarked by trusts or other intermediaries will be treated as though it is a payment of income that is liable to PAYE tax.

Because of this ruling we believe that use of an EBT is no longer an option for your contractors.

If your contractors are using an EBT Company, then they should immediately consider their options as they have now been made a target by HMRC and with the wide ranging MSC legislation this could also prove risky for agencies who are continuing to use these services.

Be aware that EBT providers are trying to find a quick solution which could represent further danger!

How can Redego/Tempo Accounting help?

We will contact your contractors and give them a personalised assessment of their options and the likely impact on their take home pay within a few hours. Click here to request a call back.

The services that we can supply you, subject to your requirements, will all meet the criteria below;

• No off-shore ‘tax avoidance schemes’; UK based services only
• Either limited company or umbrella company services
• No set up or leaving fees and no minimum contract period
• Unlimited advice for contractors by specialist consultants and accountants covering many different technical aspects

Please call 0203 137 64 62 now for a free consultation.

The conventional approach to signing and returning contracts (a combination of post / fax and email) is often the ‘bottle neck’ in an otherwise efficient placement process.

Larger big-budget agencies have been using “electronic signatures” to sign contracts for years, however SignatureSense’s low monthly subscription fee for agencies makes this modern business practice available to even the smallest of companies.

Alan Whitford, industry veteran and founder of RCEuro.com, the Pan European community site for recruiters, commented on SignatureSense:

“I think that this offering should be a ‘no brainer’ for recruitment businesses, where the time lost in the administrivia of contract administration can lead to lost revenue and poor client service.  The electronic signature ‘wrapper’ is ideal for confirming NDAs, Terms of Business and Contractor Agreements, all in real time. We will certainly be using the service for our future agreements at RCEuro.”

Jon Richardson, Founder of SignatureSense added:

“We are really excited to see that Agencies find such a direct benefit in using our service.  It’s only a matter of time before electronic signatures are common-place, so the ‘early adopters’ are making the most of a great competitive advantage.”

Redego are now able to offer real-time reporting of working hours to agencies.  This enables agencies to ensure that the Working Time Regulations (WTR) are being complied with and the added ability to plan future projects with reference to hours worked.

Agencies can view reports showing which contractors are close to exceeding their maximum average hours.  This makes compliance and planning much easier for agency consultants.  Whilst we always ensured our workers are given their statutory rights, this new system shows agencies and their clients that we are doing this and gives them the ability to use the data to plan future work.

The new online system is especially useful for workers on project rates where it has been difficult to monitor rest breaks.

Its proving particularly popular with agencies who engage manual workers on project rates – the risks of injury and reducing quality of work are much greater for these categories and end-clients want to know its being managed properly.

The new online system lets workers input their rest breaks with the click of a mouse as they submit their timesheet and is very simple for contractors to use.

Under the WTD regulations, all employers have to ensure that workers have adequate rest-breaks:

• maximum hours worked – avg 48 per week in 17 week rolling period
• adequate rest breaks, so workers do no more than:
  • 13 hours in any 24 hour period (day) – cap of 13 x 6 = 78 hours
  • 1 days off (rest days) in every 7 day period (week)
  • statutory minimum holiday periods (28 days not working in addition to ‘rest days’)

Whilst this is the responsibility of the employer (the umbrella company), most clients and agencies reckonise their responsibilty in ensuring they only use compliant umbrella companies that can show they are acting responsibly to protect workers’ welfare.

Another benefit of the new system is greater accuracy when calculating contractors’ National Minimum Wage (NMW) which is a key contractual element of remuneration in most umbrella companies.  Getting this wrong, can attract attention from HM Revenue & Customs (HMRC) both on breach of NMW legislation but also PAYE/NIC compliance as contractor expense claims are invariably affected by minimum wage.

With the Agencies Workers Directive now looming Redego also recognises it is key that Agencies must now work closely with their payment providers to guarantee compliance.

Redego agreements are straightforward and typically cover the following areas: -

Service levels

We can agree certain key service levels that may be important to you such as:

·         Advance payments.

·         Payment dates.

·         Contract turnaround time for new contractors.

·         Special compliance requirements (e.g. working time hours monitoring, pay levels).

·         Online services  (e.g. online timesheet management branded as your agency).

Contractor discounts

Depending on volume of business, we can provide attractive discounts available exclusively to your agency.

Revenue generation

With sole supplier agreements we can implement fee sharing schemes, where we agree a percentage of revenues go to your agency depending on number of workers.  This can be between 15% – 55% of fee income.

If you are interested, could you give us an indication of the typical numbers of contractors you have and an idea on how you would like to structure the agreement?  This is with regards to the balance between revenue and contractor discounts.  Then we can provide a definite proposal.

Please call or email me if you would like to discuss this further:

Justin Phillips

Justin@redego.co.uk

Tel: 0845 09 400 60

• One large umbrella company – will pay same-day for an extra fee.
• Another large umbrella company – pay ‘same-day’ but on the day after receipt.
• Others – pay by same-day but only on one particular day per week.

Redego pays same-day, every working day (we haven’t missed a day!).

Our customer service promise is to pay contractors’ cleared funds into their bank account on the same-day we receive funds from their agency.

For full details please visit our website.

Some of the many benefits of our payroll service include:

Fully managed state-of-the-art online system, branded in your own name.

Trained support staff for you and your contractors.

Tax-efficient payments at no cost to your workers.

Convert payroll from an overhead to a revenue source.

Increase cash flow by 50% compared to Umbrella Company.

Clear and simple pay advices for your contractors.

Same-day faster payments made by us on your behalf.

Full online management of timesheets, contracts, health & safety, working time management etc.

All payroll end-of-year forms, tax-code changes, P45s etc are handled by us.

Eliminate VAT issues in finance, medical and other zero-VAT sectors.

Our fully managed service requires minimal involvement by agencies. Simply check timesheets and authorise the final payments (all online) and we take care of every other aspect of your payroll.

Tax savings on legitimate expense claims are shared between the worker and the agency. These savings often exceed the cost of running payroll so many of our clients save money whilst gaining a superior payroll service.

For more information please read more on our website and contact me for a free quote, Justin Phillips on 0845 054 55 60 to discuss details further.

View our guide for consultant here.

You are now able to:

• View a concise summary of our leading umbrella payment service.
• Request for Redego to send an information pack and call a contractor.
• Calculate the appropriate “Umbrella Company Rate” based on the equivalent Payroll Rate.
• Chat with us live online – Available shortly.

You can still always give us a call on 08450 940 060 if you have any questions.

Feel free to add the URL http://www.redego.co.uk/index.php/agency-consultant-guide as a link on your company Intranet.

HMRC have issued a new press release on 6 August regarding their concerns about intermediaries offering services to pay temporary workers (such as umbrella companies).

Due Diligence

They have also published a ‘Due Diligence‘ guide for companies who use umbrella companies and other ‘labour provider’ intermediaries.

What agencies must do

In the guide, HMRC claim that it is the agency’s duty to check the operation of any intermediaries they use to pay their workers or face losing ‘the right to reclaim vat’.

Examples of such checks include:

• is the labour provider registered and operating in the UK?
• what is the directors background (ie. are they professionally qualified)?
• do they have employers liability insurance (have you seen the certificate)?
• do they guarantee to pay the National Minimum Wage (NMW), especially where expenses repaid to workers would otherwise reduce their salary to below the NMW?
• do they conduct statutory ‘Right to Work‘ checks?
• do they pay ’self-employed’ workers rather than through PAYE?
• do workers have employment contracts?
• do they pay expenses to workers without sight of receipts (ie. through dispensations)?

“HMRC are obviously fed-up with employment businesses using non-compliant labour payment services – ignorance will no longer be a defence.  In this latest press release, they now expect employment businesses to complete a certain amount of due diligence or suffer the consequences:  ‘(agencies) will lose the right to recover vat’. ‘ When you consider this in conjuction with the new construction clampdown, they obviously mean to focus more on agencies in the future.” Redego

They were concerned by the mis-use of dispensations and scale-rate allowances and were considering new legislation. However, in their Pre-Budget Report, the Treasury confirmed that they would not be changing the rules, but would tighten compliance for umbrella companies abusing dispensations.

Beware of Dispensations and Scale Rates

Many recruitment industry newswires were recently reporting this as ‘good’ news, but for those contractors and agencies using umbrella companies that operate dispensations, the warning was in the small print:

“However, in the light of evidence from the consultation confirming poor levels of compliance in this area HMRC will refocus its efforts to ensure that the current regime is properly applied”

Compliance bandwagon

Undoubtedly, many umbrella companies will now attempt to jump on the bandwagon and drop their ‘No Receipts Required’ offerings, but whether or not they have the compliance culture or technology to deliver remains to be seen.

The Redego ethos
Agencies and contractors seeking peace of mind are focusing on the few umbrella companies that have an ethos of expense compliance.

Redego has always believed that ’scale rates’ in the context of umbrella companies are an anomaly and have never used them in over 10 years of operating payment services.