Finance Bill April 2016

Ahead of the changes set to be made in the new finance bill we wanted to explain how it could affect our clients and our temporary workers.

From 1st April 2016 the Government and HMRC are changing the way they treat travel and subsistence claimed by temporary workers. The result will be, without further action being taken, many workers taking home less net pay each week. Here at Dutton we have been working to find a solution for you that we believe maximises the workers take home pay, and minimizing the effect on the client, whilst remaining compliant.

We’ve put together a short FAQ to answer any questions you may have about how the changes will affect our workers and clients.

What are the changes?

Per the Finance Bill 2014 Agency legislation on false self-employment, any worker that comes under SDC should be taxed as PAYE.

Agency workers that are being paid via a PAYE Umbrella model at the moment are currently able to offset their home to work travel & subsistence expenses against gross income, increasing their take home pay.

This also allows the client to maintain a flexible and cost effective workforce, without the liabilities of being an employer.

In this latest budget, from April 2016 for those same workers HMRC are also removing the ability to offset travel and subsistence expenses to claim tax relief.

Depending on the workers use of this relief and the payroll model currently used, the changes may have a significant impact.

What is SDC?

If anyone in the contractual chain Supervises a worker, Directs on how to undertake a task, or Controls their working hours or locations (or has the right to), other than for health, safety or security purposes the worker should be taxed as PAYE.

What is the solution?

You may have had other agencies getting in touch, telling you horror stories, and offering all sorts of weird and wonderful solutions.

Be warned!

Many of these so called solutions will not be compliant, and will often leave the client (and not the agency) in HMRC’s firing line.

We are aware of many agencies offering schemes to workers that are too good to be true, and they are not compliant. HMRC have already stated they will attack any model they deem to be tax avoiding non-compliant.

You can be assured that at Dutton we will only discuss approved model we believe are compliant and have your best interests at heart.

What’s next?

For the past 6 months Dutton have been working on fully compliant solutions that maximise take home pay for the worker, while still protecting the client.

Our consultants have been working hard to make sure everyone is fully informed and compliant by April 2016.

What if I’m working for Dutton at the moment?

If you are currently working for Dutton Recruitment, we will be in contact with you to discuss your current payroll model and whether it is still suitable for your requirements. 

Our consultants and resources will also be able to discuss with you the alternatives if one is required. Please get in touch with your consultant should you have any concerns.

If you have any questions in the meantime, get in touch with your consultant or local branch.

Rest assured, Dutton Recruitment are looking after you!