False Self EmploymentOn 6th April 2014 HMRC’s legislation on agencies and temporary workers became live. This now places the liability for workers not being paid via a PAYE payroll squarely with recruitment agencies.
In addition, where any workers are engaged outside of a PAYE payroll, the agency now also carries the responsibility for demonstrating to HMRC why this is so.
But, because Benifacts is a wholesome PAYE Umbrella we do not provide workers with any additional models for being paid, such as self-employment. Benifacts offers transparent and entirely UK-based employment of workers.
Off-shore ProvidersThe Off-Shore Intermediaries Legislation of April 2014 now leaves the agency with the responsibility for any unpaid Employers National Insurance Contributions attributed to workers operating through off shore providers. This represents a reinforcement of the previous employment rules.
Although yet to be confirmed, it is likely that the agency will face similar reporting requirements around this as with the agency and temporary workers legislation.
PCS (Personal Company Services) & IR35Working through your own limited company (PSC) remains a legal alternative to seeking employment status via an Umbrella Company like us. The PSC option will be the right choice for some, but only if the contract is not subject to IR35.
Benifacts Umbrella is exempt from both IR35 and the Managed Service Company legislation and offers greatly reduced administration and responsibilities.
Before setting up a PSC and using a dividend model to enhance tax efficiency, it is vital that you 100% confident of your contract and IR35 position.
Managed Service Company (MSC)The Managed Service Company (MSC) legislation has been in force since 2007, with the aim of reducing ‘unfair competitive advantage’ amongst workers compared to ‘compliant businesses and workers’.
As a PAYE Employment Based Umbrella Company, Benifacts Umbrella takes pleasure in exemption from the MSC legislation and we therefore represent no third party debt transfer risk under MSC.
For providers offering other solutions in addition to PAYE Umbrella, the legislation may remain an issue.
Benifacts offers purely PAYE Umbrella with all our workers employed by us.
Overarching ContractYou are a professional contractor and you intend to seek a succession of assignments through your contractor umbrella company. Your contractor umbrella company's contract of employment is an over-arching contract and enables you to establish your permanent work place at your home. You will use your home office to:
- Find new contracts
- Undertake skills training
- Use as a base to travel to your temporary assignments
- Complete the paperwork for your current assignment
- Contractor’s assignments therefore take place at temporary workplaces. This is important because
- You can claim an allowance for use of your 'home as office' - which is free of tax
- You can claim an allowance for business travel to a temporary workplace.
The 24 month ruleThis rule states that the cost of travel from your home (being your permanent place of residence) to your contract site address (your temporary workplace) is only allowable as a tax deductible expense for as long as you believe your contract will not exceed 24 months.
If you know your contract will be longer than 24 months, you should not claim travel expenses. Once your contract has exceeded 24 months (which you were unaware previously that it would do) you are now deemed as a permanent employee and therefore unable to claim travel expenses
National Minimum Wage (NMW)The National Minimum Wage (NMW) is the minimum amount per hour that most workers in the UK are entitled to be paid. There are different levels of NMW, depending on a worker's age
The age at which a worker becomes entitled to the main rate was reduced from 22 to 21 on 1 October 2010.
Workers of compulsory school age you are not entitled to the NMW and some of their other employment rights are also different. The NMW rates are reviewed each year by the Low Pay Commission and from 1 October 2012.
All Benifacts Umbrella employees are paid at least the NMW, however, for those who are paid on or around the NMW they will be unable to claim expenses as to do so would breach the NMW thresholds.
In case of need of any further assistance, please feel free to speak to our Experts and know about how we can assist you - 0203 519 2121