From construction... for construction
At Hudson Contract, we completely understand the business-critical importance of maintaining a flexible workforce in construction. After all, our most senior people have worked in the sector themselves. We have run construction companies. We have hired subbies. We have been at the ‘sharp end’ of dealing with HMRC and ploughing through all the paperwork, whilst also trying to grow our business. This inside-out experience of owner-managers’ needs and preoccupations helps us to offer clients the services they require against a backdrop of ever-changing – and ever-more-complex – legislation.
We originated the market for secure self-employment in construction in 1996, and we’ve been ahead of everyone else ever since.
In 2016, choosing the correct employment intermediary continues to be an important decision. The Onshore Employment Intermediaries legislation, introduced to crack down on false self-employment, means your decision must be seen to made on a basis of surety. HMRC has always required due diligence, but these new tax laws require a deeper level of audited analysis of the workplace circumstances of every operative you engage on a short-term basis.
For Hudson Contract, this is nothing new: auditing the workplace circumstances has been part of our procedures since 2002.
These questions should help you decide.
HMRC expects you to carry out a range of due diligence checks before you appoint a labour service provider - ignorance is no defence if you subsequently fail a status inspection. So it's essential to ask any CIS intermediary or umbrella company you’re thinking of using to supply you with a detailed explanation of how their business model works, and explain the legal framework or case law they operate under. You’ll also need sample contracts. In HMRC’s eyes, if anything goes wrong, it is YOU who are liable, rather than the provider. Make sure you know exactly what’s expected of you by following HMRC’s guidance, which you can found here. And if someone offers you a cheap deal, remember the old saying: ‘penny wise, pound foolish’.
HMRC’s advice leaflet lists some of the key questions you need to ask. Pay particular attention to a payroll provider’s company history and financial status.
When Hudson Contract applied HMRC’s core questions to 22 service providers, we discovered three were insolvent, five had no filed accounts, six were registered offshore, four were replacement businesses, one was not registered under CIS and seven had multiple companies registered with similar names. Please be careful.
No. It is workplace circumstances that dictate employment status, and differing circumstances rule out a one-size fits all contract. Under the 2014 regulations, records must be kept and statutory returns made for operatives who qualify to be paid on a self-employed basis. If HMRC challenge the information in these returns, will your payroll provider argue the case for you and pay any fines, as Hudson Contract guarantees to do? If any other company says they will do this, we recommend you get it in writing.
HMRC are so concerned about rogue payroll providers that they have set up a Special Investigations Unit to combat fraud and the general non-compliance that results in significant loss of UK tax revenue. If your provider turns out to be bogus, the employment relationship will be invalid and the bill for the tax that has been evaded will land on your desk.
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Nothing seems to be too much trouble for Hudson Contract, with queries answered quickly and call backs received promptly. I feel much more confident with the system knowing I can pick up the phone without being made to feel a nuisance!
You need to be watertight these days and that means case law. Something that is very much evident with Hudson Contract.
HMRC is getting even tougher on false self-employment in construction. So using a payroll company to protect you against the consequences of a status inspection makes sense... but only if you choose the right one.Find out more
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