The End is Nigh! (Again)

You may be aware that in April 2016 the Government will implement new policy around how expenses are used by contingent workers. This currently seems to apply to both those being paid by PAYE and also those running their own company.

So at face value, the end of the "contractor" is nigh IF that contractor is overly exposed to "expenses" as part of the salary calculation. But before we all pack up let's examine a few points:

• There will be a budget in July which may address this either way;
• We won't know the detail (regardless of a budget) until late summer at best, probably autumn;
• Close to 50% of our employees do not claim T&S expenses today and don't use our services purely on the premise of tax savings. Far from it;
• We have projects where there are zero expenses and everyone is very happy thanks;
• The "low paid" sector is where this will be felt the most keenly and the supply chain under most pressure.

Here at Optionis towers we are confident that professional services such as ours will once again comply with the new legislation in the same way we have over the years with EAA, AWR, Pensions and more. Why I hear you shriek (especially if you own an Accountancy and spy an angle!)?

• Devil is in the detail of course but we (Parasol) are so much more than simple processes of PAYE. The employee / employer relationship is far stronger than perhaps is understood and defining the difference between a traditional consultancy business that sends its workers out and allows expenses, and ours that does the same will be interesting.
• Will Agencies be prepared to take hundreds and hundreds of workers onto PAYE with the on-cost, risks and compliance challenge? This for me is a real challenge for the industrial sector but can be done compliantly, if the supply chain wants it.
• How are PSC's affected (Ltd Co's) ? We provide both Ltd Co support and employment services so can address a number of scenarios relatively easily. I remain convinced that a professional employment business (Parasol) will remain available to mitigate the risks and hassles for everyone. 
• There are significant risks to PAYE returns to HMT especially in the low end if HMRC get this wrong. We already know about "elective deduction models" in that space and more, it's very naive to think that this will not affect that space.

So with the benefit of experience of addressing these challenges before and not being a business that has foundations built in "schemes" we are confident that the future will be just fine. Sure, there will be the usual noise and perhaps even some hysteria but if you're a Contractor, Agency or End-client you can be safe in the knowledge that we shall be there to support, protect and make your life easier in the long run.