Summary of Threat
New legislation disregards employment relationship, and requires all intermediary suppliers to operate PAYE on all payments made to INDIVIDUALS
A large number of contractors unaware of the new laws or have been provided with a perfunctory, ill informed response by their supplier
Contractors must demonstrate the appropriateness of any arrangement, concentrating on supervision, direction or control
Get the right advice & ensure you are protected
Speak To Colette
Specialist Construction Payroll Advisor
THREAT IN DETAIL
Far reaching changes in how payments to individuals are taxed when paid through ANY type of intermediaries (including a traditional agency supplier, a payroll provider, an umbrella company, a specialist provider or even a sub-contractor) were introduced as part of the budget in 2014. The legislation was proposed and implemented very rapidly and with little consultation and, whilst receiving a degree of publicity at the time, it has passed into law without much attention.
The new legislation disregarded the traditional definition of an employment relationship, and required all intermediary suppliers to operate PAYE on all payments made to INDIVIDUALS, unless they could prove they were not subject to a new test of direction, supervision or control.
To give this new legislation financial teeth a debt transfer provision was included. This meant that financial liability for deduction of PAYE was extended up and down the contractual chain with end-users potentially being ultimately liable for omissions or failures of intermediate contractors.
The biggest concern is that a large number of contractors, especially those with long standing agency supply arrangements, are still not aware of the new laws or have been provided with a perfunctory, ill informed response by their supplier. This is particularly concerning, as the transfer of debt provision has the potential to make individual business owners liable for tax bills they did not know existed.
The new regulations require contractors to demonstrate they have actively considered the appropriateness of any arrangement, concentrating on supervision, direction or control (SDC), a simple declaration, provided by your existing supplier but signed by you, confirming that your tradesmen are self-employment is most definitely not good enough!
What is the solution?
Engage EEBS as your sub-contract labour supplier. We have worked extensively with the Aspire Business Partnership the leading employment taxation specialist in the industry to create Revenue compliant, bespoke solutions for construction industry clients. Our systems are independently verified, and are tailored to each clients needs.
How does it work?
EEBS engage the sub-contractors that you introduce to us, under terms individually tailored to ensure complete legal compliance for both you, and the sub-contractor. We then act as the contractor with full legal responsibility for those individuals, and any employment challenges that arise during the engagement.