Blog posts written on Friday February 2017

Posted Friday Friday, February 17, 2017 by Administrator

Public sector, temporary agency staff, HMRC and April 2017

 

There have been a number of legal rulings recently concerning temporary agency staff, zero hours contracts and the Gig economy.  In April 2017 HRMC rules specifically relating to public sector candidates or workers and PAYE will change.
To quote HMRC if you are a Public Sector Contractor (PSC) and you supply a public body (any organisations that are deemed public bodies under the freedom of information act) including but not limited to:

  • Government departments, legislative bodies, armed forces
  • Local government
  • NHS
  • Schools and further and higher education institutions
  • Police
  • Other public bodies such as the BBC, Channel 4 and The British Museum
  • Publically owned companies (wholly owned by the Crown and/or the wider public sector such as Transport for London)

 

You are now responsible for determining your workers’ PAYE status if you are the last link in the payment chain before the contractor.


So how does this affect the chain which can include umbrella companies and the like? Umbrella companies offered a service of tax optimisation and their margin or profit came out of the tax that they could usually legally avoid paying. The change in the rules means that it is no longer the contractor’s decision as to their PAYE status. They will have the same tax deducted willy-nilly. Probably the major reason for having Umbrella companies has been eliminated.

What are the options?

  • You can still use an umbrella company but it will likely now cost.
  • You can use a factoring company to smooth payments and income, it will cost.
  • You can use an accountant to do your payroll and to submit to HMRC, it will cost.
  • You can use a payroll package that does the MHRC calculations and submissions. It will have to integrate with you staff allocation system and it will take time and cost.
  • You can use our Ava Advance agency sheduling software with RTI, which allocates staff, does your HMRC calculations and submissions and costs no more than it did just for staff allocation, compliance checking and automated messaging, email, texts, smart apps, invoices and payslips.

 

Contact us to find out more. 01491 845 400



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