If you’re a recruiter placing contractors and temporary workers, you’ll no doubt be seeking assurances that the umbrella companies on your PSL are up to speed with new legislation.
From travel and subsistence (T&S) expenses restrictions to salary sacrifice reforms, there was plenty for ADVANCE and other contractor services providers to get to grips with during April.
For peace of mind that you’re working with the very best, here are five questions we’d suggest that you ask your current partners.
1) Do you understand ‘supervision, direction or control’?
As we’ve written previously, supervision, direction or control (SDC) is the new test for determining an umbrella company contractor’s eligibility for home-to-work T&S expenses.
Liability and risk sit with umbrellas rather than agencies, but a lack of SDC understanding on the umbrella’s part could see a contractor being denied T&S expenses incorrectly.
Here at ADVANCE we have been dealing with SDC in self-employment since 2014.
Our experience and expertise mean we’re uniquely placed to help you and your candidates navigate the changes to umbrella.
2) What about salary sacrifice?
Often overlooked amid the hullabaloo over travel and subsistence, the new salary sacrifice changes are equally significant.
In simple terms, the new rules mean umbrella providers have had to change how they pay the contractors they employ.
Have your current partners done this? Are they aware which expenses are captured by the salary sacrifice reforms?
For example, an ADVANCE umbrella employee who ‘passes’ our SDC status test is able to claim variable mileage expenses in the usual way. This is because mileage isn’t captured.
Meanwhile food, accommodation and non-mileage travel expenses are captured. We will fix these expenses at the start of a contractor’s assignment, if he or she is free from SDC.
3) Have you sought external advice?
Regardless of the level of internal expertise, no contractor services provider has a monopoly on wisdom when it comes to complying with new legislation.
That’s why, in updating our umbrella solution, we have worked closely with our network of market-leading professional advisors, including:
- employment tax specialists at a Big Four accountancy firm; and
- the UK’s leading QC barrister on employment tax.
This gives us, our agency partners and the contractors we employ confidence that our approach is robust and compliant. Can your current providers say the same?
4) Are you accredited?
There are plenty of accreditation bodies out there, but only full Freelancer & Contractor Services Association (FCSA) members undergo annual external compliance audits.
Full members – as opposed to associate members – must demonstrate that they comply with the FCSA’s strict code of conduct.
It’s this rigorous approach that has led the Recruitment & Employment Confederation (REC) to advise its member agencies to work only with FCSA members.
We’re proud to be the only full FCSA member to have passed the body’s compliance audits for umbrella, limited company and self-employment solutions.
Furthermore, as an official REC business partner we have received this recommendation from REC chief executive Kevin Green:
We strongly advise our members to only work with contractor services organisations who have earned FCSA accreditation, so we’re delighted to be able to point them in the direction of ADVANCE.
5) Have you handled the transition well?
It goes without saying that some providers have managed the introduction of the new legislation better than others.
Has the company communicated effectively with its contractor employees and agencies throughout? Did it experience any payroll problems following the changes to its solution (assuming changes have been made)?
Asking questions such as this will enable you to build a picture of the umbrella’s professionalism and assess whether or not the transition went smoothly.
Get in touch
Keen to hear more about what we can do for you and your contractors? Call us today on 01244 564 564 and ask to speak to the New Agency Enquiries Team.
Alternatively, send us an email.