31 Jan 2014

False self-employment consultation

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If you engage self-employed staff you will soon need to reconsider your position!

The government put proposals forward which they plan to bring into force in April 2014 which would make it virtually impossible for companies to engage people on a self-employed basis without the risk of an HMRC “agency challenge”.

If there are three people in the contractual chain such as a client, a company and a self-employed person, the agency legislation will bite regardless of whether you are an agency, a contractor or a one man band. This will apply unless you are able to satisfactorily prove a lack of supervision, direction or control as to the manner in which the services are provided – in which case PAYE and national insurance will have to be operated. This is an incredibly difficult hurdle to jump as proving a lack of control is extremely hard.

HMRC have suggested that health and safety is ‘not likely’ to amount to the right of supervision control but this is a dangerous statement to be reliant on as HMRC could quickly and easily chance their stance on this. The Consultation says that this proposed legislation should not impact IR35 however HMRC’s guidance on this subject already says that it will apply to PSC’s and will take precedence over IR35.

If the proposed legislation comes into force, get in contact with Marble as we may be able to help your business.