struggling with definition of "employment intermediary"

[breaktwister]

This question is mainly around what constitutes an "employment intermediary" for purposes of T&S. This article from Crunch indicates that many traditional businesses that would not consider themselves to be "employment intermediaries" are unwittingly caught by the wide definition:

https://www.crunch.co.uk/blog/contra...oure-affected/

"includes consulting services companies, facilities management, the events industry, the hospitality sector, the care sector, the audio-visual Industry – basically anyone who is hiring out workers to another business" I would add solicitors firms to the list.

I have also seen HMRC give this definition in a number of places: "An intermediary is any person who makes arrangements for an individual to work for a third party or be paid for work done for a third party". Well that just describes a huge percentage of the business that goes on in the country!

I am trying to figure out why consultancy firms, small or Big 4, can offset T&S for their employees who travel to perform work at temporary location (payrolled consultants of course). Why can they offset these costs as business expenses but an umbrella company cannot? It surely has to do with the definition of an "employment intermediary" but what makes a Big 4 consultancy firm "not an employment intermediary"? I know that they sometimes perform larger pieces of work on fixed bid basis but the typical is to charge out a daily rate for the personal services of a payrolled consultant which makes them an "employment intermediary" in that activity.

[MrMarkyMark]

This question is mainly around what constitutes an "employment intermediary" for purposes of T&S. This article from Crunch indicates that many traditional businesses that would not consider themselves to be "employment intermediaries" are unwittingly caught by the wide definition:

https://www.crunch.co.uk/blog/contra...oure-affected/

"includes consulting services companies, facilities management, the events industry, the hospitality sector, the care sector, the audio-visual Industry – basically anyone who is hiring out workers to another business" I would add solicitors firms to the list.

I have also seen HMRC give this definition in a number of places: "An intermediary is any person who makes arrangements for an individual to work for a third party or be paid for work done for a third party". Well that just describes a huge percentage of the business that goes on in the country!

I am trying to figure out why consultancy firms, small or Big 4, can offset T&S for their employees who travel to perform work at temporary location (payrolled consultants of course). Why can they offset these costs as business expenses but an umbrella company cannot? It surely has to do with the definition of an "employment intermediary" but what makes a Big 4 consultancy firm "not an employment intermediary"? I know that they sometimes perform larger pieces of work on fixed bid basis but the typical is to charge out a daily rate for the personal services of a payrolled consultant which makes them an "employment intermediary" in that activity.

They provide a permanent employment contract for one, pay for people whilst on the bench, manage large amounts of risk etc. etc.

Consultancy companies are not employment intermediary's.

HTH.

[northernladuk]

struggling

The rest was TL;DR

[SueEllen]

Is there a reason why you have to start numerous threads for every time you think of something? Is it possible to collate all your thoughts, think for a bit, do some research then start a thread asking all your thoughts and pointing out your research on that topic? Otherwise it looks like you are trolling.

In regards to your question - HMRC deliberately either doesn't give a definition of one of their terms or when they do they make it confusing. This is why the tax code in the UK is so big compared to other western countries and there are so many loopholes. These loopholes are then randomly closed with HMRC taking retrospective action in some cases arguing that people have abused the "spirit" of the law.

There are currently no legitimate workarounds around the new IR35 regulations in the public sector accept for the ones that have already been discussed here for many months.

[breaktwister]

They provide a permanent employment contract for one, pay for people whilst on the bench, manage large amounts of risk etc. etc.

Consultancy companies are not employment intermediary's.

HTH.

What you have said is common sense of course. But my point is that the definition of employment intermediary does not take these factors into account.

Are you saying that any consultancy firm that has payrolled employees can send them out and offset T&S as an expense as long as they are on permanent contracts and are paid while on the bench? None the the relevant laws say anything about assuming risk.

[northernladuk]

OP..What exactly is your situation at the moment?

[breaktwister]

Is it possible to collate all your thoughts, think for a bit, do some research then start a thread asking all your thoughts and pointing out your research on that topic? Otherwise it looks like you are trolling.

WDF - I have read for hours on this bulltulip and included a link to an accountants view and quote from HMRC regarding their definition.

If there are firms out there that can charge T&S then their structure can be copied. What enables them to do it?

And if they legally cannot do so given the changes in laws in the past two years in particular, then they are prime candidates for test cases or lobbying to have the rules fixed or narrowed.

I fail to see how, as a self-employed consultant, even if I am on an umbrella payroll, my T&S is not a business expense, but other firms can put it through as such.

[RonBW]

Why can they offset these costs as business expenses but an umbrella company cannot? It surely has to do with the definition of an "employment intermediary" but what makes a Big 4 consultancy firm "not an employment intermediary"? I know that they sometimes perform larger pieces of work on fixed bid basis but the typical is to charge out a daily rate for the personal services of a payrolled consultant which makes them an "employment intermediary" in that activity.

An umbrella company is primarily in the business of supplying labour; a consultancy is not.

If you look at the consultation documents for the public sector IR35 changes, the differentiating factor(s) are in there.

[RonBW]

I fail to see how, as a self-employed consultant, even if I am on an umbrella payroll, my T&S is not a business expense, but other firms can put it through as such.

That's a question that HMRC and HMT should be able to explain to you. I'm not being sarky here but try asking HMRC - give them a ring. Even if all it achieves is that they have a call record and someone has to go find out the answer.

[gables]

OP, you need to read the information in the link you provided a little bit more closely, to me it's obvious when an organisation is an intermediary or not. Here's a clue from the link:

So, businesses need to ask:

• Do you use off-payroll workers to fulfil customer contracts?
• Do their payments get made without deductions for PAYE/NIC?

If the answer is yes, you may be an intermediary.

So a consulting firm is NOT an intermediary when it provides it's own (payrolled) employees, but is when it uses\provides a contractor like me and to be fair I'd probably be engaged via an agency (an intermediary) but if I was direct then the consulting firm becomes the intermediary.