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by Rob Crossland

Stock up with tinned peaches and powdered eggs!

September 29, 2011 in AWR, Contractor News, Freelancing, Industry comment, Life, Recruiter News

It’s almost the 1st October and the end of the world is nigh! I have already sent the wife down to Morrisons to clear the shelves of tinned peaches and soup.

For those of you who have been blissfully unaware (e.g. not in recruitment or in the service industry that supports it) then 1st October sees the formal start of the Agency Workers Regulations (AWR) (and you can go here if you need the basics). In very simple terms it means a clock has started ticking, not as some might think, as precursor to doomsday but to the 12 weeks hence (24th of December!) where a vulnerable agency worker can potentially receive equal pay and conditions of a full time counterpart (if one exists). I may sound a bit cynical but the amount of work that has gone into preparing for this has been quite substantial and for the vast majority of Parasol and Clearsky users it won’t make any difference, it will be business as usual. As a very sensible and safe business we were already doing 90% of what the regulations require so most of our work has been in trying to educate and inform in a market which has very interesting views.

So the boring message is that it’s very much carry on as normal at Parasol House and Clearsky towers. We have shiny new payslips for Parasol employees and some changes in terminology but for contractors it won’t be much different. For Agencies, it’s just as dull, were open for business, a model of operation for all those interesting views and primarily a nil cost, no hassle approach to the legislation.

I suspect I will have to write some more as the dust settles in October and the first potential claims emerge (probably in Union backed environments) after December but in the meantime I shall put the peaches in the garage next to the peas that we bought in December 1999.

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Avatar of Rob Crossland

by Rob Crossland

AWR – so what do we really know?

February 11, 2011 in AWR, Contractor News, Freelancing, Industry comment, Recruiter News

We at Parasol have been running an Agency Workers Regulations website for some time now and like to think we are reasonably close to developments. We work with over 2000 recruitment businesses so hear a lot about what is concerning staffing businesses big and small. We are also a founder member of the FCSA trade association whom are involved in the DBIS guidance workshops alongside the REC, CBI, TUC, APSCo and others. I’m not saying we are on the “inside”, no one is but I do like to think we are very close to the subject matter and can therefore provide a decent balanced view.

So, what do we know?

  1. Guidance will not be a silver bullet and is not law, the regulations are.
  2. Guidance will make things clearer though.
  3. The complexity of the UK flexible workforce industry is not recognised in the regulations, all temporary workers in all guises are basically vulnerable.
  4. There is definitely not one size fits all solution.
  5. It is an opportunity for recruiters to show added value to end-clients.
  6. Contractors/freelancers are largely unaware of implications.
  7. There are risk management and operational framework techniques available.
  8. It’s not the end of the world.
  9. A properly constituted employment services provider (umbrella as was) is already 8/10ths of the way to AWR compliance now.
  10. Shameless plug – Parasol are experts in the field of temp workforce management.

So what can Agencies expect to need to do and resolve with clients? Well, dialogue is important and bringing people up to speed. This is not on the basis of fear, it’s on the basis of understanding where an end-client sees the temporary workforce going for them. At worse case, the staffing business is going to need to collect some data about rates of pay from that end-client and in turn be prepared to pass that data on to providers that will largely mitigate the risks for the agency and the end-client. In addition, there may need to be conversations around margin, rates and tenure but is that really such a bad thing?

And what about swedish derogation I hear you cry as you unpack your meatballs and sofa. Well, there is certainly the basis of a compliant (I hate the word “outside”) AWR model and again I will make the point that the model is very close to what a professional provider (Parasol) does today. Adding the extra componets is not trivial but equally with a long term view, achievable.

Let’s not forget that the courts will be the judge of this new world and as we have seen in Germany (Union class cases) the need for a staffing business to engage with a professional provider is paramount.

Our AWR site has of course more details and do get in touch via this site or one of the others if you have any specific questions you would like answering. See you at an AWR seminar soon, we will be the ones with solutions, not gloom :)

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Avatar of Rob Crossland

by Rob Crossland

June Budget 2010 – Contractor win?

June 22, 2010 in Business Expenses, Contractor News, Freelancing, Industry comment, Life, Recruiter News, Tax

So Mr. Osborne delivered his first (seemed short and snappy to me) budget and whilst the devil is in the detail (available here ) here is my take on how it might help (or hinder) Contractors, Agencies and those important end clients. Let’s have a look at the “big things” first:

  • In general terms it appears to be a relatively pro business budget so that for those of us working in this sector, we may feel somewhat optimistic rather than doomed. The counter of is that the “25% cut in department spending” over four years could have ramifications for those working on Government projects. However, as is always possible, that could be actually countered by a permanent headcount freeze and supplemented by Contractors. Let’s not forget that UK Gov is one of the biggest users of Contractors!
  • It appears that the NI incentives to set-up businesses (outside of the land known as the “South East”) will also be helpful and will be interesting to see how that affects single or two person businesses.
  • VAT increase to 20% – could have some cash flow implications for smaller recruiters but providing decent credit control is in place it should not be an issue.

Turning to the real impact on Contractors I think we can say that it is relatively good news at that level (in other aspects it depends on your view on alcohol taxation etc and some of the proposed welfare cuts). I think the general view is that Umbrella contractors will get some benefits and those operating through Limited Companies will also feel some improvements.

  • Umbrella contractors will benefit from an increase in personal allowances to the tune of £1000 and with an increase in the employers NI threshold, the nett position should be an improvement. But what about the rise in VAT I hear you cry! Well, if you claim valid business expenses (and perhaps even more a reason to do so now) then you should be better off. If you’re an higher rate tax payer it could also mean that if you claim expenses and with an increase in allowances, your tax position could be better. The caveat is of course that the expenses must be legitimate and as everyone knows, we do not promote the abuse of this.
  • The reduction in small companies taxation to 20% will also be well received by small business and this will be the case for those operating a Limited Company. Those same companies may also benefit from those changes in employers NI and the commitment to review small business taxation (which includes ir35) is to be welcomed.
  • For some contractors, the increases in capital gains could be a pain if you have an extensive property portfolio but for those that are building up say a consulting business, the entrepreneurs relief improvement is of course welcome.

So – a generally pro Contractor budget in my opinion. It won’t be perfect for everyone but for those of us trying to get on and create some opportunities for ourselves and others, it sounds ok.

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by Rob Crossland

Interesting times ahead – ir35 to go?

May 24, 2010 in Contractor News, Freelancing, Industry comment, Life

So the dust has settled (for now) and our new masters are setting about making the changes they believe are necessary to improve our economy and improve our lot.

In the recently published coalition document there were probably two of three key specific Contractor related matters that come to mind:

  1. IR35 was mentioned along the lines of tax simplification;
  2. Public cuts;
  3. No mention of Agency Workers Regulations (AWR).

For me IR35 and tax simplicity for Contractors is all about “certainty”.  As drafted, IR35 is subjective and, therefore, using the same set of facts two different views can be taken.  If the legislation was clear and could provide a series of specific tests that then produced a balanced answer and that answer met a criteria level then taxpayers, advisers & HMRC would save a lot of time and certainty would be gained for all.

Cuts – I think that in the short term, public spending cuts may have an impact as certain Government department are forced to reduce temporary headcount and then permanent. Once that round is over, guess where they will probably go to then ensure key projects are then delivered?

I don’t agree with some commentators views that AWR will be removed or stopped. This is European wide legislation and therefore cannot be simply put to one side. It may get some guidance updates (welcome) but I can’t see it going!

Let’s hope the new government can address some of the issues that the flexible workforce faces as in my opinion, they are a crucial part of the UK’s recovery process.

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Avatar of Rob Crossland

by Rob Crossland

Another week, another consultation

July 24, 2009 in Contractor News, Industry comment, Recruiter News, Tax

HM Treasury announced yet another consultation this week, “False self-employment in construction: taxation of workers”. No doubt that reams of technical analysis will be produced but the bottom line seems to be that HMT think people are getting tax advantages by claiming to be self-employed when (in their view) it is clear the worker is employed (in terms of what actually happens).

So it’s the turn of the already beleagured Construction Industry to cope with this and interestingly the consultation period ends in October. I suspect consultation had to be published but that ministers know it won’t be a popular change.

So the recently revised Construction Industry Scheme (CIS) looks under further scrutiny and the estimated (by HMT) 300,000 workers will be under the microscope via the providers of payroll/tax “solutions” to this industry. Doesn’t effect Parasol at all but could have implication for providers that provide CIS or sole trader solutions.

Is it right? Until UK Gov creates a true definition of the class of workers in the whole of the temporary space (and get’s EU on side) then “abuse” and short cuts will always happen. Level playing fields need to be created but with one of the oldest and most complex tax systems in place, it won’t happen anytime soon. Is it also a product of the need to increase tax take given our recent economic issues? Probably all three.

Shout if you’re in the Construction Industry and have a view.

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