Finance Bill 2016
The new proposed ‘Finance Bill 2016’ legislation which is due to be introduced in April this year will affect all contractors working through umbrella companies.
The legislation concerns the withdrawal of the ability of contractors to claim travel and subsistence expenses as a legitimate tax allowance if their role falls within Supervision, Direction and Control (SDC). More details regarding SDC will be announced in the spring budget on 15th March 2016 but it is expected to cover the majority of contractors currently employed through an umbrella company Definitions of SDC can be found on HMRC’s website.
The concept of contractors working through an umbrella company lends itself to SDC, from the initial directive of the agency to the controlling authorisation of timesheets on a weekly basis. We will hopefully be able to put together an SDC test for those employees who feel they are outside of SDC once the details become available after the Budget.
At present this legislation does not apply to contractors working through their own limited company, although HMRC are in the process of restructuring IR35 this coming year. Setting up a limited company might be an option for some of our employees that are currently outside IR35. If you are interested in exploring this option please contact Danielle on 0161 927 7489 or email@example.com
This new legislation currently relates to travel and subsistence. Administration charges and pension contributions will still be put through as a taxable allowance. In order to maintain our high quality service to all employees and fall in line with the continuing changes, BSL Umbrella will still continue to run a weekly payroll, operate a flexible holiday scheme and a workplace pension scheme in line with Legal and General. Unlike other umbrella companies we are not reliant on agency payment up front before we pay our employees on a weekly basis. We will continue to provide a full employment service incorporating statutory sick pay, statutory maternity pay and statutory paternity pay as well as fulfilling all annual year end returns in the form of P60 and P11Ds.
Please note that this does not apply to those contractors that are able to claim re-imbursed expenses which are paid by the client through the payroll.
Policy paper – click here for more information
Agency Workers Regulations
The much discussed Agency Workers Regulations came into force on 1 October 2011. The regulations are designed to protect vulnerable agency workers by giving them entitlement to the same basic employment and working conditions as their permanent colleagues.
What this means for you.
(The following is an overview, as outlined in the official BIS guidance.)
- If you are a hirer of agency workers: If you are an employer and hire temporary agency workers through a temporary work agency, you should provide your agency with up to date information on your terms and conditions so that they can ensure that an agency worker receives the correct equal treatment, as if they had been recruited directly, after 12 weeks in the same job. You are responsible for ensuring that all agency workers can access your facilities and are able to view information on your job vacancies from the first day of their assignment with you.
- If you are a ‘temp’ agency worker: From 1 October 2011, after you have worked in the same job for 12 weeks, you will qualify for equal treatment in respect of pay and basic working conditions. You can accumulate these weeks even if you only work for a few hours a week. Your temporary work agency is likely to ask for details of your work history to help establish when you are entitled to equal treatment.
- If you are a temporary work agency: If you are involved in the supply of temporary agency workers, you need to ask the hirer for information about pay and basic working conditions (when it is clear that the agency worker will be in the same job with the same hirer for more than 12 weeks) so that they are treated as if they had been directly recruited to the job.
How is BSL Umbrella responding to the changes?
BSL Umbrella is offering a fully compliant ‘Match Permanent Pay (MPP)’ solution, in response to the Agency Workers Regulations. We feel that the MPP solution works in the best interests of our contractors, based on the fact that our contractors generally earn more than their permanent counterparts and enjoy similar benefits.
Steve Shepherd, Managing Director of BSL Umbrella explains:
“We see this as a great opportunity to build even more direct links with our agency contacts, by sharing information and ensuring that steps are taken to check that all BSL Umbrella contractors receive equal treatment as outlined in the AWR guidelines. Contracts will only be accepted once we feel comfortable that these checks have been made and that our contractors are being represented fairly.”
If you have any questions regarding the regulations, please email your query to firstname.lastname@example.org
- The official BIS Guidance: www.bis.gov.uk/assets/biscore/employment-matters/docs/a/11-949-agency-workers-regulations-guidance
- AWR summary: www.direct.gov.uk/en/Nl1/Newsroom/DG_199272