Travel and Subsistence - Ltd Co vs "Large Consultancies"

[LisaContractorUmbrella]

Ah, thanks.

So getting back to the original question, who has decided that this paragraph means consultancies are exempt? Is there any analysis online, other than a link to the proposal itself?

The consultation document refers to 'employment intermediaries' as being the target of the legislation and states that:

"For the purposes of these proposals employment intermediaries will be defined, in part, as a business primarily in the supply of labour services. As such the definition will not include professional service firms that second staff to clients as their business is not primarily in the supply of labour" Beyond this I don't believe there is a definition of a professional service firm although KPMG style themselves as such.

At the end of the consultation document there is a glossary which defines an Employment Business:

"An Employment Business (also known as an Employment Agency) provides staff who do not become employed by the hirer, but who are seconded or supplied to a client employer"

This means that there will now be arguments over the true meaning of seconded as it is used twice in the same document in conjunction with two different business models. As it will be in an employment business' interest to act as a professional service company (according to the definitions above) I would imagine there are a number of lawyers currently rubbing their hands with glee

[meridian]

And that's just summed up the problem with HMRC's thinking on this - this loophole will be picked apart before you can say tax

Ah, thanks.

So getting back to the original question, who has decided that this paragraph means consultancies are exempt? Is there any analysis online, other than a link to the proposal itself?

[fidot]

define "our staff"

You get into Employer NI, minimum wage, contract of employment etc. with that arguement, and I doubt most of can be considered employees or staff in that context.

Staff doesn't necessarily equal employee.

[LisaContractorUmbrella]

The "large consultancies" I'm thinking of are the likes of Accenture, IBM, etc. Their staff are sitting next to me, doing a roughly similar role.

In the last role I had, the Accenture bod was my mirror image in roles (he represented the solution integrator, I represented the business). He travelled down to London from the North and stayed over every week, I doubt he paid for those travel expenses personally.

The definition of "supply of labour" needs to be expanded on as well. Do we supply labour, or intellectual services?

And that's just summed up the problem with HMRC's thinking on this - this loophole will be picked apart before you can say tax

[MrMarkyMark]

In the last role I had, the Accenture bod was my mirror image in roles (he represented the solution integrator, I represented the business).

Hopefully, not a mirror image in capabilities .
I tend to think Accenture are best kept away from the technology side of things, or anything really.

[meridian]

Travel and Subsistence - Ltd Co vs "Large Consultancies"

They're trying to differentiate between companies that second their staff out to work on clients' projects, such as the big accountancy firms who conduct audits, but whose main business is accountancy and recruitment agencies whose sole income is from the supply of staff.

The "large consultancies" I'm thinking of are the likes of Accenture, IBM, etc. Their staff are sitting next to me, doing a roughly similar role.

In the last role I had, the Accenture bod was my mirror image in roles (he represented the solution integrator, I represented the business). He travelled down to London from the North and stayed over every week, I doubt he paid for those travel expenses personally.

The definition of "supply of labour" needs to be expanded on as well. Do we supply labour, or intellectual services?

[Danglekt]

define "our staff"

You get into Employer NI, minimum wage, contract of employment etc. with that arguement, and I doubt most of can be considered employees or staff in that context.

Does seem hugely unfair though

[fidot]

They're trying to differentiate between companies that second their staff out to work on clients' projects, such as the big accountancy firms who conduct audits, but whose main business is accountancy and recruitment agencies whose sole income is from the supply of staff.

While that may be true of recruitment agencies, it certainly isn't true of our limited companies. We second our staff to work on clients' projects in exactly the same way as the large consultancies.

[LisaContractorUmbrella]

I still don't get how this means big consultancies though. Is the difference in how the staff are paid? (For example, staff of a big consultancy are usually exclusively employees, whereas other contractors are usually the business owners as well? It doesn't mention salary structure though, only the "supply of labour")

They're trying to differentiate between companies that second their staff out to work on clients' projects, such as the big accountancy firms who conduct audits, but whose main business is accountancy and recruitment agencies whose sole income is from the supply of staff.

[meridian]

I still don't get how this means big consultancies though. Is the difference in how the staff are paid? (For example, staff of a big consultancy are usually exclusively employees, whereas other contractors are usually the business owners as well? It doesn't mention salary structure though, only the "supply of labour")

However, professional service firms that second staff to clients will not be caught by the new rules, as their business is not substantially in the supply of labour.

[cojak]

And more information here: CUK Forum - The Future of Contracting

[jamesbrown]

https://www.gov.uk/government/upload...n_Document.pdf

Yes, here. "Clear" is arguable However, it's in the paragraph at the top of p.13.

An employment intermediary’s business must be substantially in the supply of labour
services. Employment businesses, umbrella companies and PSCs will be within the
definition. However, professional service firms that second staff to clients will not be
caught by the new rules, as their business is not substantially in the supply of labour.

[FarmerPalmer]

https://www.gov.uk/government/upload...n_Document.pdf

[BillHicksRIP]

Is there a doc somewhere that clearly states the proposed changes to tax relief on travel and subsistence payments being removed for limited companies but not for "large consultancies" such as KPMG etc? What about offshore consultancies who place contractors in the UK? Thanks.