This time last year I brought you news of proposed legislation, which if implemented would impose a ‘control test’ on all intermediaries – including Hudson Contract. The new rules, known as Onshore Employment Intermediaries (OEI) Legislation became law in April, and are designed to tackle false self-employment.
As you would expect from the market leader, Hudson Contract has been ahead of the curve: even before the rules changed, we had already embarked on a ‘tax compliance risk assessment’. And in addition to our usual legal counsel we also engaged the services of one of the Big Four accountancy firms to help guide us through the changes.
Throughout, we have approached the changes with confidence – in part, because of the way in which the vast majority of our clients operate.
As our clients are aware, a great deal of work has been going on to ensure everyone is properly prepared for August 2015, when the new rules will begin to bite. This has been kept a deliberately low profile, in part because we saw no reason to share our expertise with the competition.
However, I would now like to publically express my thanks to the many clients who have helped us with our various audits. Equally, I have had to bid farewell to some who could not (or would not) help us to comply.
The biggest change
After many months of hard work, over 1,000 operatives have moved from CIS to Hudson PAYE – and at least as many more have left Hudson Contract to join our clients under direct employment, or in the case of the those who are less fortunate, to join umbrella-type schemes.
We are currently working our way through a program of site audits, and if yours has not yet taken place, you can expect us to visit early next year.
And our competitors? Ducking the bullet. . . for a shot in the backside. . .
The reaction has been interesting. Some appear to be in complete denial that they come within the scope of the new rules, whilst others are trying to convince our clients that by asking for audit information, we are somehow passing the buck. Nothing could be further from the truth, and thankfully, our clients can see through this type of waffle and disinformation.
Labour agencies and intermediaries have to submit the first of the quarterly reports to HMRC in August next year for the period from April 2015 and failure to report will result in an initial fine of £3,000 plus £600 a day until the matter is resolved.
That’s a powerful incentive for compliance you might think, especially as HMRC has already identified those who should be sending in reports. Those who believe that by suddenly claiming not to be intermediaries they somehow duck the bullet may well discover they are set up nicely for a shot in the backside.
On which note, if you have been approached by a competitor claiming that using Hudson Contract is risky, or that they have some magical business model which allows them to ignore the new rules, please do contact me: firstname.lastname@example.org
Finally, the ultimate strength in Hudson Contract comes from you the clients, who help us to help you, and collectively enable us to get the best advice and legal representation available.
The work you have done with us over the past twelve months will secure the status of your self-employed operatives until the next time the policymakers feel the need to legislate. And that is something we continue to guarantee. Hudson Contract will continue to negotiate the tax and employment minefields safely, leaving you free to grow your business without any risk of costly penalties for getting it wrong.