Onshore and offshore employment intermediaries

You may be aware that from 6th April 2014 legislative changes will be in force affecting the responsibility for tax and national payments for self employed and contract workers. This will not have a direct impact on you as the end client but we want to give a brief rundown and assure you that HFG are actively addressing the necessary changes to ensure compliance.

HFG is supportive of the government’s intention of using legislation to address the use of onshore and offshore employment intermediaries, to end tax avoidance due to false self-employment. The impact of this on HFG as a recruitment consultancy and as what the legislation defines as ‘intermediary one’ in the supply chain between you our client and the contract worker, is increased responsibility for ensuring the correct payment of tax and national insurance. We of course make the necessary deductions for our ‘PAYE contractors’ and will now be required to file reports to HMRC detailing those contractors engaged via HFG that, due to operating through an umbrella company or ltd company, deductions are not made for. Where PAYE deductions are due and not made by the contractor or on their behalf, HFG will make these deductions and ensure that correct payment is made at the correct time.

On embarking on a career as a professional contractor, or when accepting an interim position, contractors have three options when deciding how they will operate. Will they take the PAYE, Umbrella company or Ltd company route?

We advise all candidates to seek professional advice and support when making this decision and when setting up a company if this is their chosen route.

HFG has enhanced our compliance process and will continue to ensure that contractors engage with reputable umbrella company providers or if operating through their own Ltd company have the necessary registrations and insurances in place. As a member of the professional recruitment body APSCo we have access to ongoing guidance and advice on the impact of these legislative changes and what actions we must take to ensure compliance.

For a full list of APSCo affiliated umbrella companies, please click here.

Rupa Pithiya

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