Autumn statement 2014 and recruiters

This year’s Autumn Statement is an important one for recruiters to understand – Chancellor George Osborne announced that employment has reached 30.8m – 1m above its pre-recession peak. With an employment rate of 73%, the UK has seen the fastest increase in employment of any country in the G7, so hats off to all you recruiters!

Along with these positive growth signs the government has announced plans to tackle payday by payday (PDPD) and salary sacrifice models which are often mislabelled with the term ‘umbrella’. As seen in the Reed case (where Reed has been fined £158 million), getting it wrong can be costly. The latest news is:

1.10. Overarching contracts of employment and temporary workers. As announced at Autumn Statement, the Government will review the increasing use of overarching contracts of employment by employment intermediaries such as ‘umbrella companies’. These arrangements enable workers to obtain tax relief for home to work travel that would not ordinarily be available. The Government will publish a discussion paper shortly to inform possible action at Budget 2015.

Following the Onshore and offshore intermediaries legislation, recruiters need to be (even more) aware of who they’re partnering with. The provisions for debt transfer mean that recruiters and their end clients can be held ultimately liable for the failings of their suppliers. Looking for the cheapest or most lucrative offering is no longer a simple choice and compliance has to be the watch-word of any recruiter worth their salt.

At the time of this writing, the above quote is the latest from HMRC on the subject. In response, Managing Director of forest, Jovan Pavlicevic said:

“As the UK’s highest-qualified employment company, forest openly welcomes any crackdown by HMRC on rogue operators. For a long time we’ve been operating on a playing field that’s simply not level. Some payment models have been openly non-compliant, and many have not operated within the spirit of legislation, leading to tighter and tighter regulation. A level playing field will be a great boost not only to us, but to our agency clients and candidates too”.

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