The Onshore Intermediaries Legislation
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
The 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 Debt Transfer Provision
A “transfer of debt provision” means anyone linked to the arrangement could potentially be held liable for PAYE deemed due but not paid, including personally the directors of agencies and contracting companies.
BE WARNED: 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-employed is most definitely not good enough!
What is the solution?
Why work with EEBS?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 client’s needs.
By partnering with EEBS, you get:
Revenue compliant, bespoke solutions for construction industry clients
Systems independently verified, and tailored to each client’s needs
Full legal responsibility for individuals and any employment challenges during engagement
Sub-contractors engaged under terms individually tailored to ensure complete legal compliance
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