Agency | Redego Umbrella Company | PAYE Umbrella Company for Contractors

Temporary workers: The application of Tax, National insurance and National minimum wage legislation

Posted 25-03-2010 by Redego

Tags: Dispensation, National Insurance, overarching employment contract, Umbrella Company

In the last two years HM Revenue and Customs (HMRC) have seen a growth in arrangements which are variously described as ‘Travel and Subsistence Schemes’ or ‘Mobile Worker Schemes’. These schemes are operated by many businesses involved in the supply of temporary workers to end users: Employment Businesses and umbrella companies.

Treasury focus on ‘false self-employed’ in construction

Posted 30-09-2009 by Redego

Tags: construction, Contractor, PAYE, Umbrella Company

Treasury focus on ‘false self-employed’ in construction

HM Revenue & Customs (HMRC) have been exasperated for many years by the way the construction industry behave as if the rules on paying workers gross don’t apply to them.

They published a new consultation (July 2009) that has the look and feel of the finished article, so its more than likely to become legislation before the end of 2010.

Reading between the lines, HMRC see this as the final attempt to align the construction industry with other sectors and get 300,000 ‘false’ self-employed subbies on to PAYE. Genuine self-employed workers will be able to continue trading by passing a simple 3 criteria test. To qualify, sub-contractors would have to either:

provide their own plant & equipment (normal tools of the trade do not count!)

provide all the materials for a contract OR

provide other workers

So, how will the construction industry respond? To be fair to the industry, they have always had to balance between being ‘compliant’ with competing with other contractors who pay workers on a ’self-employed’ basis. To make matters worse, the test for employment status has always been complex, based on case law and constantly changing, so they could genuinely say they didn’t know whether a worker was self-employed or not.

Now there is a workable status test, and the Treasury’s intention has been clearly stated, most contractors will probably decide that the risk of non-compliance is too great and make arrangements to pay their workers through PAYE. They can do this through their own payroll or outsource to a compliant PAYE umbrella company, which will give workers the opportunity to claim legitimate expenses

HM Revenue & Customs (HMRC) have been exasperated for many years by the way the construction industry behave as if the rules on paying workers gross don’t apply to them.


Name:
Phone: