New Consultation on Umbrella Regulation

[eek]

The Government has launched a new consultation on Umbrella Regulation - this time on how to implement it.

https://www.gov.uk/government/consul...company-market

Reality is the best approach is for the supply chain to be responsible for the the tax due and for agencies to treated as the fee payer - but given that this consultation has 55 detailed questions needing to be answered it isn't going to see many contractors responding.

[ladymuck]

A lot of those questions are clearly not aimed at the worker.

[Protagoras]

I'm not sure that any of these questions is intended to address the disadvantages that umbrella workers must accept compared to 'proper employees'.

[eek]

I'm not sure that any of these questions is intended to address the disadvantages that umbrella workers must accept compared to 'proper employees'.

The whole point is to ensure HMRC get paid - and I have zero problems with that because temporary workers should be earning more than equivalent permanent staff.

I’ll need to go and check if equivalent pay enforcement is covered at all because it’s another area where umbrellas don’t check things

[Chris Bryce]

I’ll need to go and check if equivalent pay enforcement is covered at all because it’s another area where umbrellas don’t check things

In fairness the umbrellas aren't the ones reticent to do this - in fact the FCSA mandates that they should nag the agencies (umbrellas rarely have a relationship with the end-clients, so can't do it themselves)- it's the agencies and actually often the end-clients. End-clients have been fined for failures in this area.

[eek]

And there is an article on it at https://www.contractoruk.com/news/00...ion_plans.html for those who haven't read it.

Btw if we move to option 3 with the agency making deemed payments - there is no point being a temporary worker to maximise pension payments - you would be better going permanent and getting it set up within your salary...

Now it would be funny for it to happen but it would make umbrellas completely pointless and would quickly destroy outside IR35 contracting because the default question to an agency from HMRC will be - where is the Employer NI payment for these workers.

[andymalory]

In fairness the umbrellas aren't the ones reticent to do this - in fact the FCSA mandates that they should nag the agencies (umbrellas rarely have a relationship with the end-clients, so can't do it themselves)- it's the agencies and actually often the end-clients. End-clients have been fined for failures in this area.

But there's always a power-imbalance, if the end client is large enough. So even agencies don't have that power (though agreed its more than any umbrella will have directly).

This is why end-clients are getting away with forcing employment costs on to contractors, alongside other employment benefits.
In all but the most specialist of areas, the contractor's got little choice/negotiating power.

[eek]

But there's always a power-imbalance, if the end client is large enough. So even agencies don't have that power (though agreed its more than any umbrella will have directly).

This is why end-clients are getting away with forcing employment costs on to contractors, alongside other employment benefits.
In all but the most specialist of areas, the contractor's got little choice/negotiating power.

Nope, the forcing of employment costs is only perceived - the issue there is agencies love to advertise assignment rates rather than PAYE rates because once 1 agency starts playing that game every other agency has to follow the same logic or they don't get any applicants.

After all would you go for the job advertised at £10.50 PAYE or £13 even though the actual end pay would be the same.

[andymalory]

Nope, the forcing of employment costs is only perceived - the issue there is agencies love to advertise assignment rates rather than PAYE rates because once 1 agency starts playing that game every other agency has to follow the same logic or they don't get any applicants.

After all would you go for the job advertised at £10.50 PAYE or £13 even though the actual end pay would be the same.

Its not at all 'just' perceived. Agree that one of the issues is how agency ads work, but its also about how day rates are arrived at.

No contractor in their right mind ever agrees to a randomised day rate, say £212.63 per day (I've made this up so please no backward calculations to tell me its wrong in some way). Contractors tend to work on round numbers usually in £25p/d increments (if day rate), so £300 p/d for example.

Anything else is between the employer, agent and end client to thrash out.

[eek]

Its not at all 'just' perceived. Agree that one of the issues is how agency ads work, but its also about how day rates are arrived at.

No contractor in their right mind ever agrees to a randomised day rate, say £212.63 per day (I've made this up so please no backward calculations to tell me its wrong in some way). Contractors tend to work on round numbers usually in £25p/d increments (if day rate), so £300 p/d for example.

Anything else is between the employer, agent and end client to thrash out.

My rate is X91.34 or something stupid because when the Employer NI changed in November and either AMS (top level agency) or end client decided to pocket the difference.