On 10th December 2013 the government published a consultation document relating to the future treatment of tax for onshore contractors. Whilst the industry will comment on and analyse the proposals over the coming weeks, it is clear that the changes proposed by the ‘Onshore Employment Intermediaries: False self-employment’ consultation would if implemented affect all parties in the supply chain, including contractors, umbrella companies, employment businesses and end users.
Effect of proposals
Of significant note is the proposal to create a presumption of deemed employment for tax purposes in certain circumstances. Combined with a change so that PAYE legislation applies when the worker is ‘personally involved in the provision of the work’, and a tighter definition of the word ‘control’ as a test for application of the tax, HMRC is effectively planning to draw a significant number of workers into the PAYE regime.
These are currently only proposals…but they give a strong indication of the direction that HMRC is taking in this area. The consultation closes on 4th February 2014, with the final legislation set to be implemented in the Finance Bill in 2014.
Lawspeed will be holding seminars on this critical issue. To attend a Lawspeed seminar in Manchester or London in January 2014, aimed at recruitment businesses and service providers, book your place by emailing [email protected] or calling 01273 236236.
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.