news

Labour pledge to tackle bogus self-employment and umbrella companies

John McDonnell, the shadow chancellor, spoke yesterday and set out his concerns about the rise in self employment and the gig economy. Under a future Labour government, he said temporary workers could be given similar rights to those in permanent work, including eligibility for sick pay, maternity pay and similar benefits.  He also pledged to tackle bogus self employment.  

In response, Matthew Brown, CEO at giant says, "Any clampdown on bogus self-employment should be welcomed, however it should also be proportional and thoroughly thought through."
 

Labour and trade unions have also made repeated calls for umbrella companies to be banned. Brown went on to say,"In our opinion Labour do not fundamentally understand how an umbrella company operates.  

Ironically, a compliant umbrella company provides workers with all the rights of a permanent employee. Brown finished by saying, "Labour should look at the FCSA code to understand how compliant umbrella companies operate. Instead of saying they will ban them they should understand how they operate and fully regulate them"  

If you are a recruitment agency or a hirer and would like to know more about how giant can help please contact us hello@giantumbrella-limited.com.
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FCSA clarifies HMRC spotlight on umbrella companies

Last week, the FCSA moved quickly to clarify the latest spotlight from HMRC focussing on umbrella companies (https://www.gov.uk/guidance/umbrella-companies-offering-to-increase-your-take-home-pay-spotlight-45).

Whilst HMRC state the article focuses on umbrella companies, the content actually relates to disguised renumeration schemes offering take home pay of over 80%. As the FCSA quite rightly points out, this is not a true or compliant umbrella employer, "A true umbrella employs contractors, providing them with all the benefits of permanent employment, along with all the benefits and flexibility of working as a contractor. A true umbrella employer will process 100% of gross pay through RTI payroll, meaning that contractors are not at risk of a high tax bill at a later date."

At giant, we welcome HMRC's focus on non-compliant schemes and would reinforce the FCSA's point that a compliant umbrella company like giant creates no risk to contractors, agencies or end clients. 
Recruiters need to be vigilant in ensuring only compliant umbrella employers are on their PSL, especially with the Criminal Finances Act making them and their directors liable for tax avoidance. 

If you would like to discuss how giant can work with you, please contact us at hello@giantumbrella-limited.com.
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contractors face huge tax bills due to HMRC's loan charge

HMRC are continuing to crackdown on contractors who have been using tax avoidance schemes. Earlier in the month, The Times reported that contractors face huge backdated tax bills as HMRC chase down unpaid tax as a result of the contractors using loan schemes to reduce tax liabilities.

Julia Kermode, Chief Executive of FCSA, warns "there are now a number of schemes that are aggressively targeting professional contractors in the public sector to sell their product of higher take-home pay. They "work" by paying a small portion of your earnings via PAYE and then disguising the remaining larger part of your income as something else, often an offshore loan.  Most of these schemes are illegal.

Although these companies are suggesting they can reduce your tax and NICs, in reality you are still liable to pay those. By using such a scheme, you put yourself at significant personal financial risk. HMRC will usually backdate any charge for unpaid taxes to the date that you signed up to the scheme, and once fines and interest is added then your total tax bill will be extremely large."

At giant, we have seen a significant increase in enquiries from contractors worried about the implications for them by using such schemes, and also agencies who are reviewing their PSLs in light of the risks these providers put on both the contractor and the director of recruitment business under the Criminal Finances Act. 

If you would like to discuss how giant can help you review your PSL, or discuss how we can help your contractors move to a compliant provider, please contact us on 0330 024 0946 or email us at hello@giantumbrella-limited.com.
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HMRC argues their view on MOO, and considers a £1.2 billion cash cow

We attended the recent FCSA members meeting with HMRC present to discuss the off-payroll consultation around IR35 in the private sector. The consultation, due to finish on the 10th August, has led HMRC to hold 16 meetings with industry stakeholders and they estimate they have engaged with over 200 people to hear the market's views on how they could learn from the public sectors' experience and also how they can better tackle non-compliance. HMRC estimated the additional tax take available by reducing non-compliance of the IR35 rules was a huge £1.2billion.

It was therefore surprising to hear that all the research by HMRC around their statistics on the impact on the public sector had been via the end hirer and they had not collected any figures from employment agencies directly. Surely HMRC need to recognise the substantial role agencies play in the temporary market and need to gather evidence from both agencies and end clients?

HMRC have also clearly noted the constant challenge from contractor bodies around the omission of Mutuality of Obligation (MOO) within the CEST tool to determine IR35 status. MOO is an important factor in determining a contractors' IR35 status and considers, amongst other factors, if a contractor is acting independently or obliged to take on more work from the end client if offered. HMRC have now released a note explaining their position: https://bit.ly/2ucqofZ

The note has been heavily criticised for stating HMRC's view of the world rather than the law courts, but HMRC appear very confident of their position. It was also worrying that HMRC acknowledged that it would take some time for a contractor to reclaim the tax taken if they were wrongly caught by IR35 as the only available route is via their tax return. HMRC again appeared relaxed, pointing out the government "is interested in cashflow". A worrying response for contractors who feel they have been caught unnecessarily and perhaps shows the prize of £1.2 billion in additional tax as one too big to miss for the government.

We are receiving more and more enquiries from agencies now looking at their available options to ensure they are prepared for these changes. Many of giant's agencies and end clients now use our giant business connect (GBC) solution to continue to make payments to their contractors limited companies if they are caught by IR35 with giant, deducting the appropriate amount of PAYE and as fee payer taking all the HMRC financial risk. This ensures the contractor can challenge the IR35 decision if they wish via their self-assessment, rather than being paid via an umbrella route which would mean they cannot dispute the status and the overpaid tax is lost.

If you are an agency interested in our GBC service, reviewing your umbrella payroll options, considering the use of PAYE or reviewing your pay and bill processes, please get in touch at hello@giantumbrella-limited.com
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storm clouds forming around blanket IR35 decisions

A recent survey conducted by the FCSA of 33,500 workers in the public sector found that 50% of them had not been individually assessed on their IR35 status. Of these 50%, 42% were simply deemed to be caught by IR35, while the other 8% were granted as outside IR35 contracts without an assessment.  

The remaining 50% of workers confirmed that a compliance test had been used, 26% of these respondents suggested that a role-based approach, rather than an individual assessment, had been conducted. The other 24% highlighted that individual assessments had been carried out, but these were seldom exclusively tested via the government's Check Employment Status for Tax (CEST) tool.  

The use of blanket assessment on IR35 has been widespread and is now leading to challenges by individuals who expected an individual assessment. In particular, we have heard of cases within the medical, IT and engineering sectors.

Blanket assessments by a hirer puts them at risk if they have not taken reasonable steps and due care in reaching their decision. Agencies involved are also at risk if the worker's IR35 status is incorrectly determined or if the PAYE and NIC deductions from their limited company are calculated incorrectly. The liabilities include underpaid PAYE, interest and penalty charges.  

We have successfully supported many agencies and end hirers in compliantly managing and migrating workers impacted by the 'Off-Payroll Working Rules'. At giant, we have multiple solutions such as our giant business connect (GBC) service available to agencies and end hirers to mitigate these risks whether inside or outside of IR35. Agencies and hirers may also wish to consider alternative PAYE models such as a compliant umbrella company or outsourced employment commonly referred to as PEO (professional employment organisation). At giant, we offer both and can discuss how we can fully support you.  

For further information and support regarding Off-Payroll Working in the public and private sector, or other legislative changes, please email us at info@giantgroup.com or call us on 0330 024 0946.

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how our ISO 27001 accreditation can help you remain GDPR compliant

how our ISO 27001 accreditation can help you remain GDPR compliant
  
There is plenty of encouragement in the GDPR for the use of certification schemes like ISO 27001 to demonstrate that a business is actively managing its data security in line with international best practice.

It is also key that any intermediary engaged by a hirer or agency is also GDPR compliant and these organisations should engage with providers who hold such accreditations to avoid the risk of huge fines and reputational damage.

ISO 27001 is the international best practice standard for information security and encompasses the three essential aspects of a comprehensive information security regime: people, processes and technology.

what does the GDPR say?

The GDPR states "the controller and the processor" shall implement to ensure a level of security appropriate to the risk, including where necessary:

1. the encryption of personal data
2. the ability to ensure the ongoing confidentiality, integrity, availability and resilience of processing systems and services 

Encryption of data is recommended by ISO 27001 as one of the measures that can and should be taken to reduce the identified risks. ISO 27001's core tenets is also the importance of ensuring the ongoing confidentiality, integrity and availability of information. Not only is confidentiality important, but the integrity and availability of such data is critical as well.

At giant, we are proud to say we have held the ISO 27001 for 10 years and are fully prepared for GDPR as a result.
 
If you would like to know more about how we can help you reduce your exposure to GDPR risk, please get in touch with us at hello@giantumbrella-limited.com or call us on 0330 024 0946.

www.giantumbrella-limited.com
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Criminal Finances Act 2017

Criminal Finances Act 2017

The Corporate Criminal Offences for the failure to prevent the facilitation of tax evasion are live legislation as of 30 September 2017. The Act introduced a new liability on companies who fail to prevent the facilitation of tax evasion in the UK or overseas.

 your liabilities?

  • If you or your employees have facilitated tax evasion, you can be criminally liable and subject to fines
  • Not knowing is no defence
  • Directors and consultants can be personally liable

protecting your business - actions

As a company you need to have reasonable procedures in place to demonstrate your approach to tax evasion. Timely self-reporting to HMRC will be seen as an indicator of reasonable prevention procedures:

  • Due diligence/risk assessment – review your suppliers for tax compliance and to eliminate risk areas
  • Review & implement PSL arrangements and strictly control it
  • Training and communicating to your staff – allow employees to recognise and prevent tax evasion and clarify the company's commitment to its prevention
  • Include clauses in employee and supplier contracts concerning non-engagement in the facilitation of tax evasion
  • Prevention procedures – enforce and review regularly
  • Companies, their directors and employees will be legally liable if they fail to prevent tax evasion.

how giant can help?

At giant we have been operating compliantly as a supplier for over 25 years. We can help you review and eliminate your risks. Please contact giant at info@giantgroup.com or call 0330 024 0946.

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The General Data Protection Regulation 2018 (GDPR)

The General Data Protection Regulation 2018 (GDPR) will come into force from 25th May 2018

what is GDPR?

GDPR is a new legislation aiming to give greater protection and rights to individuals regarding how their personal information is being handled – there will be changes on how businesses and bodies process and handle that data. 

Going forward, worker consent must be clear and distinguishable. If you are penalised, penalties can reach up to 4% of annual global turnover or €20million (whichever is greater) - fines of 2% can also be imposed when not having the records in order.

as a business, you need to:

·         assess the impact for your business 

·         identify and review who you are sharing personal data with 

·         identify where you are acting as a data processor

·         be prepared to respond to individual requests 

·         take into account 'privacy by design' concept

·         assess the current level of security 

·         consider appointing a Data Protection Officer (DPO)

processes being put in place by giant include:

·         clear process to obtain express consents 

·         simple process to withdraw the consent given

·         regular data cleaning routines 

·         right to be forgotten

·         easy and straightforward data portability

are your suppliers GDPR compliant?

You need to ensure your supply chain is compliant. Are the umbrella and accountancy companies you supply compliant? Have you reviewed your PSL?

Please contact giant to discuss how we can help you. Call us on 0330 024 0946, or email us at info@giantgroup.com.

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Changing the landscape of employee background checks – giant screening

The award winning giant group has launched giant screening. Utilising the best of breed technology and exceptional operational support, giant screening will deliver pre-employment screening and background checking to enhance client onboarding activities.

This new service will be led by Mat Armstrong who brings a wealth of experience in this field. With over a decade in the industry, Mat has seen screening evolve. Utilising technology, giant screening will offer a service beyond normal employment vetting, delivering the necessary compliance elements required. Through this solution, clients can take advantage of flexible and configurable technology to meet their pre-employment screening and background checking requirements.

Mat Armstrong, Managing Director at giant screening, said “I am delighted to join giant. Our solution offers complete flexibility. Utilising great technology, we are changing the landscape of screening and background checking. Our focus is on three core areas: accuracy, speed and service. Our pricing is transparent so there are no surprises.”

Matthew Brown, Managing Director at giant group, said “At giant, screening is something we have been doing for a number of years. We have chosen to launch this service to assist clients in line with our company ethos to deliver market-leading compliance. We have done this for 25 years for various clients specialising in the recruitment and finance sectors. Our experience and technology will take screening to the next level.”

For more information, visit www.giantscreening.com
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Mathew Armstrong joins as Managing Director for giant screening limited

The award-winning giant group has appointed Mathew Armstrong as Managing Director to lead giant screening limited. This service offers the very best technology and operational support to deliver pre-employment screening and background checking.

Mat has over 11 years screening industry experience across managed services and technology. Prior to this, Mat spent a number of years in HR consultancy and has also delved into the financial services industry with a heavy focus on compliance. We speak to Mat on his new challenge and his plans for giant screening.

What are the aims for giant screening?

The key objective is to bring screening up-to-date.

Many years ago, we saw the screening industry move from the traditional paper processes to online technology. Aside from that, little has really changed. At giant screening, we are looking at ways to develop processes and improve the candidate experience. This will allow screening to be more beneficial to clients with the ultimate aim of adding more value to the business.

What drew you to giant?

I believe giant has a proven understanding of adding value in various areas of business. For 25 years, giant has been supporting clients with unrivalled compliance -  giant has delivered screening procedures for a number of major financial institutions for almost 10 years.

There are clear synergies between giant and myself – there is a positive focus for screening. The technology available is a big draw - we are determined to create a ‘proper’ screening process.

How are you finding your new role?

The move to giant has met all expectations so far and the support around the business is great. I admire the enthusiasm and it is nice to start something where we are not inheriting any existing problems. This allows us to think forward and I believe the future is very positive for giant screening.

What can clients expect from giant screening?

Clients can expect a flexible approach to the way we deliver screening services. It is very important to deliver a flexible service rather than the traditional linear processes that currently exist where systems are built to deliver a set process without being able to deviate from that course. That’s fine if every client wants this, but it’s not the reality with clients often being shoehorned into a way of doing things that suits the supplier much more than them. At giant screening, we work with clients to deliver within their current processes and develop around their requirements. We want technology to drive the processes in our operations, not dictate them. That’s why flexibility is a key element of everything we do.

At giant screening, we can design and deliver screening programmes to meet client needs, no matter how particular, whatever the industry or regulatory environment. We can start from scratch or enhance existing processes.

Customer service has a key emphasis in the brand identity at giant screening. We are interested in that bit in the middle. We think about our clients and their applicants. Everyone involved in the screening process should receive an excellent experience and this is what giant is committed to deliver.

For more information, email mathew.armstrong@giantgroup.com or call 020 7167 4480.
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Off-payroll working in the public sector

After months of discussion and speculation, off-payroll working has been introduced in the public sector.

Here is a short recap of the implications for the 'fee payer'.

  • The fee payer, typically the recruitment agency, is the entity contractually responsible for paying the intermediary, usually a Personal Service Company (PSC), for completing the work. 
  • The fee payer is legally responsible for ensuring the correct tax and National Insurance Contributions are paid when paying the individual's PSC.
  • The fee payer is liable for processing PAYE and NICs for contractors where the assignment is deemed inside IR35.
  • The fee payer is required to pay other employment costs – e.g. the apprenticeship levy. They will be responsible for collecting personal data, deducting the appropriate employers and employees NIC and PAYE tax, reporting via RTI, paying HMRC, and issuing P45s and P60s.
  • If the hirer incorrectly determines a contractor as outside IR35, there will be unpaid tax and NI which the fee payer will be liable for.
  • The new legislation says the hirer must provide their decision on whether a public sector assignment is inside or outside IR35 by the later of the contract signing or contract start date.
  • If more information about the decision is required, it needs to be requested in writing and provided by the public body no later than 31 days after the request.
  • If the information is not provided, or the public body has not taken reasonable care, they become the fee payer and are liable for the IR35 decision and any tax payments.
  • Unless the public body has not taken reasonable care, the agency as fee payer still has the financial risk associated with the correct IR35 decision and also the correct taxes being deducted.

At giant, we are hosting further breakfast seminars to explore the effects of the legislation, the options available and the solutions from giant. To join one of these, please email info@giantgroup.com.

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Off-payroll working in the public sector

From 6 April 2017, off-payroll working will be introduced in the public sector. 

what are the changes from April? 

  • The "fee-payer", typically the recruitment agency, is the entity contractually responsible for paying the intermediary, usually a Personal Service Company (PSC), for completing the work. 
  • The fee-payer is legally responsible for ensuring the correct tax and National Insurance Contributions are paid when paying the individual's PSC.
  • The new legislation says the hirer must provide their decision on whether a public sector assignment is inside or outside IR35 by the later of the contract signing or contract start date.
  • An amendment to the rules has placed an obligation on the public body to take reasonable care in making their decision on whether an assignment is inside or outside of IR35.
  • If more information about the decision is required, it needs to be requested in writing and provided by the public body no later than 31 days after the request.
  • If the information is not provided, or the public body has not taken reasonable care, they become the fee payer and are liable for the IR35 decision and any tax payments.
  • Unless the public body has not taken reasonable care, the agency as fee payer still has the financial risk associated with the correct IR35 decision and also the correct taxes being deducted.

It is disappointing that the public body did not also have an obligation to provide more information about their IR35 decision including reference to the HMRC online tool before the contract started. Hopefully, most of them will do this as a matter of course.

By bringing in the reasonable care obligation, public bodies should think carefully about whether assignments are inside or outside of IR35 rather than giving blanket responses. This may also have a positive impact on the number of contractors who stay within the public sector to carry out their roles.

which organisations are affected?

  • Government departments
  • NHS
  • Police
  • Local authorities
  • Education
  • Media companies such as the BBC and Channel 4
  • Housing associations

what are the implications for the fee payer?

  • The fee payer is liable for processing PAYE and NICs for contractors where the assignment is deemed inside IR35.
  • The fee payer is required to pay other employment costs – e.g. the apprenticeship levy. They will be responsible for collecting personal data, deducting the appropriate employers and employees NIC and PAYE tax, reporting via RTI, paying HMRC, and issuing P45s and P60s.
  • If the hirer incorrectly determines a contractor as outside IR35, there will be unpaid tax and NI which the fee payer will be liable for.
  • All assignments where payment is made on or after 6 April 2017 will be affected.

Partnering with giant will eliminate the risk and the administration for agencies.

At giant, we are hosting further breakfast seminars to explore the impact of the legislation, the options available and the solutions from giant. To join one of these, please email info@giantgroup.com.

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The 2017 Budget

On Wednesday 8th March 2017, Philip Hammond delivered his first Budget.

So, what are the key outcomes?

off-payroll working in the public sector

It is confirmed that from 6th April 2017, agencies will be responsible for determining the IR35 status for public sector assignments. This is ultimately the responsibility of the agency even though the public body should provide their decision on whether it is inside or outside IR35. Those deemed inside IR35 will have tax and National Insurance Contributions deducted at source.

Unfortunately, the PSC 5% tax free allowance is also being eliminated to simplify the administration of the reformed rules and reflect the transfer of responsibility.

HMRC have released the online Employment Status Service tool (ESS) to provide an IR35 status decision. The tool is essentially a set of questions that need to be answered around the working practices of the engagement and will determine if a worker on a specific engagement should be classed as employed or self-employed for tax purposes. 

flat rate VAT scheme

The government also confirmed the introduction of a new 16.5% rate from 1st April 2017 for businesses with limited costs such as labour-only businesses which are most contractors. The new flat-rate VAT rate of 16.5% will apply to a 'limited cost trader' where the costs of goods purchased is less than 2% of turnover or less than £1,000 a year.

This will affect most contractors and will mean that any 'profit' from the flat rate VAT scheme will disappear.

National Insurance Contributions (NIC)

Class 4 NIC rates for the self-employed will increase by 1% from April 2018 from 9% to 10%. This will increase by a further 1% from April 2019.

dividends allowance

The dividend tax free allowance will decrease from £5,000 to £2,000 from April 2018.

personal tax free allowance

The personal allowance will increase from £11,000 to £11,500 from 1st April 2017.

The higher rate tax threshold is increasing from £32,000 to £33,500.

corporation tax

From 1st April, Corporation Tax will fall to 19%. By 2020, Corporation Tax will decrease further, reaching 17%.

For more information, contact giant on 0330 024 0946 or email info@giantgroup.com

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The Online Employment Status Service (ESS) is now live

HMRC have released their online employment status tool – a month before 'off-payroll working' is introduced in the public sector.

The tool is essentially a set of questions that need to be answered around the working practices of the engagement and once this is completed, it will provide a status decision on whether the candidate is inside or outside IR35. The ESS can be accessed here.

The ESS will determine if a worker on a specific engagement should be classed as employed or self-employed for tax purposes. 

As this is a beta test phase, the tool may change. However, this will not affect the results you have already received. HMRC have confirmed they will stand by any results given by this version of the ESS (subject to the information entered being correct). At giant, we would be interested to receive your feedback once you've used the tool.

The final 'off-payroll working' legislation will be published on 20th March leaving very little time before it is effective on 6th April. 

At giant, we are hosting further breakfast seminars with the next one taking place on Wednesday 8th March. Join us to explore the ESS, the impact of the legislation, the options available and the solutions from giant.

If you would like to join a breakfast seminar or arrange a meeting to discuss your requirements, please email info@giantgroup.com.

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Charity event raises £25,000

A charity event, sponsored by giant, raised over £25,000. A gala ball and auction was organised by Decision and held at Wellington College.

Decision is a charity that aims to help young people through mentoring opportunities by a network of high profile, successful individuals in fields such as sport, business, politics and the arts.

The event was hugely successful, not only in terms of raising money but in raising interest in becoming a mentor to young individuals in underperforming schools and deprived areas within Berkshire. The ball was attended by 84 people and the auction raised significant funds including a Michelin chef experience for 6 people which brought in £7,500. Other items included a box at the Royal Albert Hall which sold for £1,600.

Matthew Brown, Managing Director at giant, said “We are delighted to support Decision. Will Morison is very passionate about the cause and to raise £25,000 is a fantastic achievement. This could rise even further. Well done Will and Decision.”

Will Morison, Co-Founder, Decision, said “This initial fundraising for Decision was a great success. Following our first mentoring event at Easthampstead Park School we are looking to allocate the funds raised to expand and grow this mentoring programme further. A huge thanks to everybody that has supported the charity thus far, in particular to giant for sponsoring the event.”

For more information on Decision and the work they do, please click here.

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Off payroll working in the public sector

From April 2017, new IR35 legislation for the public sector shifts responsibilities and liabilities from the candidate's company to the agency. The agency will be responsible for deciding the IR35 status of PSC candidates.

what does this mean for agencies?

For those that fail IR35, the agency will be responsible for deducting employee PAYE on the PSC contract value (as though the candidate was an employee of the agency) and paying the PSC the net amount plus any VAT on their invoice. Importantly, the agency must pay employers NIC and the apprenticeship levy from their agency margin.

Additional administration will include the collection of candidate personal data, RTI reporting, paying HMRC as well as issuing P45's and P60's.

If the agency gets the IR35 status decision, tax calculations, reporting or payments incorrect, HMRC will recover any tax shortfall from them.

All payments after 5th April 2017, irrespective of when the work was carried, will be affected by the new legislation.

what should agencies do next?

Realistically, agencies need to decide what they are going to do by the end of January and appropriately communicate with their public body clients and workers in February.

To arrange a meeting to explore the impact of the legislation, the options available and to assess the solutions from giant, email info@giantgroup.com for more information.

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Update: off payroll working in the public sector

Following the Autumn Statement, HMRC (via the draft Finance Bill 2017) have provided more clarity on the operational and financial risk facing recruitment agencies that place candidates through their own Personal Service Company (PSC) in the public sector. The public body is responsible if there is direct engagement.

From April 2017, new IR35 legislation for the public sector shifts responsibilities from the candidate's company to the agency. The agency will be responsible for deciding the IR35 status of PSC candidates. For those that fail IR35, the agency will be responsible for deducting employee PAYE on the PSC contract value (as though the candidate was an employee of the agency) and paying the PSC the net amount plus any VAT on their invoice. Importantly, the agency must pay employers NIC and the apprenticeship levy from their agency margin. Additional administration will include the collection of candidate personal data, RTI reporting, paying HMRC, issuing P45's and P60's.

If the agency gets the IR35 status decision, tax calculations, reporting or payments incorrect HMRC will recover any tax shortfall from them.

On 1st April 2017, HMRC will go live with their new online IR35 status tool. If all the information is entered correctly, HMRC will stand behind the tool's IR35 decision. With significant focus on unconditional substitution and the lack of any supervision, direction and control it would seem that only a small percentage of PSC candidates will be outside IR35, according to the tool.

To help the agency make the IR35 status decision, the public body hirer must provide their view of whether the PSC candidate is inside or outside IR35. However, the agency remains liable for making the correct final IR35 decision.

As with any new legislation it is important to consider resultant behaviours. Some public bodies and agencies may say that they do not want to engage with PSC's in the future. As an alternative, an agency may offer umbrella employment or agency PAYE. However, not all agencies operate PAYE and some of those that do, do not want to have lower margins and add more cost and contingent employment risk.

Many PSC candidates have also said they will want to maintain their PSC status, particularly those who toggle contracts in the public and private sector. Additionally, some want to at least keep their PSC in the short term to see how the new landscape evolves. Agencies are therefore looking at offering a choice of operating options for the workers whilst minimising their IR35 financial risk.

All payments after 5th April 2017, irrespective of when the work was carried out, will be affected by the new legislation. With Christmas and the New Year break, this leaves just two months for agencies to decide what they are going to do and to appropriately communicate with their public body clients and workers.

Join one of the nationwide giant breakfast seminars taking place in January 2017 to explore your options and assess the solutions available. Email info@giantgroup.com for more information on dates and locations.

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Budget announcement: from April 2017, significant financial risk for agencies that place PSCs in the public sector.

After the recent consultation, today's budget has confirmed that the Government will present new legislation (expected 5th December) detailing the reform of the intermediaries legislation known as IR35 for all public sector engagements. As part of the Finance Bill 2017, the legislation will ensure that contractors working through their own Personal Service Company (PSC) will, from April 2017, only be able to pay dividends if they are legitimately self-employed contractors. The considerable financial risk of non-compliance will sit firmly with the party contracting with the PSC. Generally, this is the recruitment agency but could be the hirer where there is direct engagement.

The proposed changes have the following implications:

1. The PSC will no longer decide on their IR35 status. Instead, responsibility will shift to the agency. 

2. For PSCs that the agency decides fail IR35, the agency will be responsible for calculating the amount of PAYE due (on each remittance) and pay this amount to HMRC as well as including it in an RTI submission. Additional information will be required from each PSC director to enable this.

3. Intermediaries reporting will also be affected.

HMRC will have financial redress against the agency if the agency makes the wrong IR35 decision, miscalculates the PAYE liability or does not make the payment to HMRC. 

Matthew Brown, Managing Director of giant group, commented "This is a very significant financial risk for agencies that place PSCs in the public sector. It is not their core competency to make tax compliance decisions yet they could be faced with financial ruin if they get it wrong. The additional administrative burden will also be significant, including gathering more information from the director of each PSC. Even the PAYE calculation will be complicated and most agency systems will not have been amended to facilitate it."

HMRC will be introducing a new online tool to enable an employment status (IR35) decision to be made. They are suggesting that if all the information entered is correct then they will stand behind the online tools decision on whether the assignment is inside or outside of IR35. It remains to be seen how effective this tool is but HMRC are expecting those in the public sector to use it and for it to be useful for those operating in the private sector. HMRC expect the tool to be the new standard for IR35 decision-making.

At giant, we have hosted a number of breakfast seminars throughout the UK during the Summer with over 100 agency representatives attending. There will be additional seminars throughout December and January to discuss the implications of the actual legislation and our solution which will completely remove all the financial risk and administration from the agency.

If you would like to attend one of the seminars, email us to reserve your place. For a confidential discussion with giant please contact us on 0330 024 0946.

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IR35 Public Sector Reform

As part of the 2016 Budget, the government announced the reform of the intermediaries' legislation (IR35) for public sector engagements. This is known as 'Off-payroll Working in the Public Sector.'

From April 2017, individuals working through their own Personal Service Company (PSC) in the public sector will no longer be responsible for deciding whether IR35 applies and then paying the relevant tax and National Insurance contributions. This responsibility will instead move to the public sector employer, agency or third party that contracts with the worker's PSC. The consultation period ends on 18th August 2016. 

Where a PSC contractor is supplied by a recruitment business into a public sector body, the recruitment business must decide if IR35 applies. If IR35 applies, the recruitment business must make the appropriate tax and National Insurance deductions, report the taxes through RTI and account to HMRC for the amounts due. If the recruitment business gets it wrong, they will be liable for the underpayment and the subsequent interest and penalties imposed by HMRC.  Where the public body engages the PSC directly the public body will be liable.  

So who is affected?

- Government departments, local government, legislative bodies, armed forces

- NHS

- Publicly owned companies

- Schools and further / higher education institutions

- Police

- Other public bodies including museums and television broadcasters 

The government will provide an interactive online tool which can be used to determine whether IR35 applies to a PSC contractor's assignment although there is a widely held belief that this will be hard to achieve.  

Matthew Brown, Managing Director at giant group, said "In the build-up to the legislation changes, giant will provide regular updates at key stages of the process. Once the legislation is finalised, giant will release new solutions with the aim of easing the burden on agencies."

For more information, please visit www.giantprecision.com or call 0330 024 0946. 

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Shortlisted in 2 categories at the 2016 Payroll World Awards

The focus on staff development and a significantly improved employee benefits and rewards scheme has led giant to be shortlisted in 2 categories at the 2016 Payroll World Awards. The categories are Best Employer in Payroll and Benefits and Rewards Provider of the Year and follows up on the success of 2015 when giant were winners in the ‘Best Umbrella’ category.

At giant, staff are offered the opportunity to progress, develop personal and professional skills, and grow within the company. Employees are kept up to date regarding legislation changes and its impact. Engagement is very much at the forefront of company philosophy and employees can benefit from a range of savings and exclusive offers via giant advantage.

Through giant advantage, employees can save over £2,500 per year on salary sacrifice schemes and over £1,000 on retail and leisure savings. There is also an unlimited employee assistance programme that is available for professional and personal issues. On top of this, there is an array of additional benefits with more being added as the company strives to enhance giant advantage even further.

Matthew Brown, Managing Director at giant group, said "We are delighted to have our services recognised by the panel for internal staff development and our employee benefits and rewards scheme. This follows up on a successful year last year where giant was awarded ‘Best Umbrella’ company and ‘Best Umbrella Provider’ for the 7th year in 10 by readers of Contractor UK. We strive to make giant an employer of choice where individuals are given opportunities and we are delighted that this has been recognised externally."

The awards take place on Thursday 3rd November 2016 at the Hilton London Bankside. Stay tuned for further information.

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24/7 assistance: how giant support employee wellbeing

A recent study carried out by Westfield Health found 53% of respondents who have taken time off work due to mental health issues feel uncomfortable speaking to their line manager about the reason for their absence. This research also reveals a third of respondents do not have a close enough relationship with their line manager to talk openly about their mental health.

At giant, an employee assistance programme is in place for employees to utilise. This is a 24/7 service that is available to contractors who become employees via giant advantage as well as head office staff for personal or work issues and provides confidential professional support for stress, bereavement, debt or any other issues that adversely affect work performance. This allows an employee to speak openly about a problem and receive independent advice and guidance from a counsellor.

Matthew Brown, Managing Director at giant group, said "At giant, we take employee wellbeing very seriously. Our employees can receive confidential access to professional advice to help them tackle any concerns that may affect them at home or at work. This is just one of a number of employee benefits and wellbeing initiatives we are introducing to assist our employees on a personal and professional level."

Alongside this service, employees can also benefit from specialist wealth planning, low-cost personal loans and free credit checks. Personal accident insurance is also included at no extra cost.

For more information on the employee assistance programme and the range of retail and leisure discounts available, please visit www.giantadvantage.com

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Leading the way for employee wellbeing opportunities

A recent study by Close Brothers Asset Management revealed nearly half (48%) of the employer respondents have no wellbeing strategy in place within their workplace and 16% are currently developing one. Through the enhanced employee rewards and benefits scheme, giant advantage, giant has implemented a substantial benefits and rewards scheme, identifying specific needs and challenges that employees face on a daily basis.

Since the turn of the year, giant has increased the array of benefits available offering employees generous retail and leisure savings, salary sacrifice schemes on childcare vouchers, cycle-to-work schemes, mobile phones and a new car leasing scheme along with an unlimited employee assistance programme that offers 24/7 counselling for workers dealing with stress, bereavement, debt or any other issues through impartial, confidential and professional advice. Whether an employee experiences a personal or professional issue, on-hand confidential advice is readily available. With a wide range of other benefits including free personal accident insurance, giant advantage is actively aiding employee wellbeing.

Matthew Brown, Managing Director at giant group, says "We have worked hard to provide a range of employee benefits through giant advantage. This is a renowned scheme having been recognised by the Benefits Excellence Awards and we are adding even more as we strive to save our workers thousands each year. With 95% of our workers opting into the scheme, it is going from strength to strength."

Through the employee wellbeing options available, giant advantage recognise that employees should feel supported in both their working and everyday lives.

For more information, please visit www.giantadvantage.com

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Cycle to work – enhancing your personal fitness whilst saving you money

A recent survey by the Cycle to Work Alliance reveals 81% of those participating were attracted by the savings offered by the scheme on the back of rising travel costs.

89% of those that took part in the survey believed it improved their general fitness; 52% believed it had contributed to weight loss; and 46% believed it contributed to them being less stressed.

As part of the enhanced employee benefits programme at giant, (giant advantage), employees can buy a bicycle on a 12-month purchase plan as part of four salary sacrifice schemes. The giant advantage cycle-to-work scheme allows an employee to save up to £400 per year and purchase a bike of their choice.

The cycle-to-work scheme is part of the government’s vision ‘to promote healthier journeys to work and to reduce environmental pollution’ and will get you up to £1,000 worth of bike and safety equipment, paying a monthly salary sacrifice over 12 months.

Matthew Brown, Managing Director at giant group, commented "We are delighted to offer this cycle-to-work offering to our workers as part of a number of salary sacrifice schemes that save thousands each year. We are working to enhance giant advantage even further to provide a range of benefits that enhance the physical and financial wellbeing of our workers."

As well as providing enhancements to personal fitness and mental wellbeing, giant advantage also offers a range of other health benefits including medical insurance, accident insurance and an unlimited employee assistance programme which may be used for personal and professional issues.

For more information, please visit www.giantadvantage.com.

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Employee benefits – enhancing a worker’s financial wellbeing

A recent survey carried out by Neyber reveals 67% of the employees that participated believe their employer does not care about their financial wellness with more workers looking to their employer for help.

Realising the effects of a challenging economy in recent years, giant have developed a suite of employee benefits through giant advantage. This includes opportunities for users to reduce their everyday financial costs from high street shopping discounts, leisure and wellbeing savings as well as an unlimited employee assistance programme that can be used for personal or professional issues. Personal accident insurance is also included as part of giant advantage at no extra cost.

Honoured by the Benefits Excellence Awards, giant advantage is a huge benefits programme that saves workers thousands each year. Alongside the everyday savings mentioned above, giant also offer salary sacrifice schemes whereby the employee can exchange part of their taxable gross salary for HMRC-approved benefits such as childcare vouchers, mobile phones, cycle-to-work schemes and a new car lease saving over £2,500 per year collectively. 

Matthew Brown, Managing Director at giant group, comments "At giant, we have worked hard to build a range of benefits to save thousands per year and have used our bargaining power to find the best possible deals for our employees. We are adding further benefits as we strive to make giant advantage even better."

Through giant advantage, workers can also benefit from savings on larger purchases – car financing, for example. Working with affiliate specialists, giant also offer free credit checks, discounted currency exchange rates and guaranteed low interest loans helping people to consolidate their debts into manageable monthly expenses. A number of further money-saving services are also on offer from specialist wealth planning to private medical insurance and career guidance and support.

For more information, visit www.giantadvantage.com.
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