Compliance and Legislation

 

Working in a Compliant Way
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    Morson is committed to identifying and offering compliant solutions for temporary and contract recruitment. Whether you are contracting in the UK, a PAYE employee of Morson or are working through one of our approved suppliers, we aim to ensure that our labour complies with the appropriate legislation.

    As our clients increasingly demand global solutions, Morson aims to satisfy legislative requirements in both the UK and the jurisdiction in which you are working, thus reducing risk for our contractors, for Morson and for our clients.

    We have identified below some links that may be of use to you. We will update these links as required to try and ensure that you have the information you require at your fingertips.

 

Useful UK Information

 

Useful Global Information

 

Intermediaries: Travel & Subsistence Legislation
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    Intermediaries: Travel & Subsistence Legislation

     

    SUMMARY

    As you may already be aware, there will be changes affecting the way in which contractors engaged via Umbrella Limited companies get paid after 6 April 2016. This involves the removal by HMRC of dispensations previously used by Umbrella Companies with regards to travel and expenses paid to their employees. Typically of late HMRC has not yet published the final legislation which is expected on 16 March 2016, yet this is to be implemented and law from 6th April 2016.

    The Umbrella company community and associated bodies have been assessing the impact of this on them and their employees, which clearly varies from person to person. In essence though where expenses are being claimed, then tax relief will likely no longer be available which would mean a reduction in net take home pay is likely.

    Our understanding is that those contractors providing services to us via a Limited Company (outside of IR35) will not be impacted by this.

    The Umbrella companies will shortly start communicating the changes to their respective contractor communities. We would ask you to visit their websites to keep abreast of the situation. We will of course liaise with those companies on our PSL also to aid communication.

    What is it all about?
    1. The legislation will primarily impact umbrella companies and thereby workers working as an employee of umbrella organisations claiming travel and subsistence site based expenses.
    2. The Government will be implementing its proposals to remove tax relief on home-to-work travel and subsistence from April 6th2016 – change to ITEPA.
    3. “Individuals working through employment intermediaries will not be allowed to claim tax relief on their travel and subsistence (T&S) expenses, where the worker is under supervision, direction or control (SDC) in the manner in which they carry out the work”.
    4. The legislation actually goes one step further than that and prohibits T&S expenses being claimed where there is a right of SDC. Some parties are suggesting that HMRC may look at working practices also in coming to a view.
    5. There is a further legislative clause that prohibits expenses claims where salary sacrifice is applied. As always contractual and working arrangements are very pertinent and impact the situation.
    6. It is not clear that any T&S claim can continue at all, it may need the umbrella and worker to confirm that there is no SDC however any relief might then only be able to be claimed annually in arrears, but that is a matter for each umbrella company with regards to individual circumstance.

     

    Useful links

    https://www.gov.uk/government/publications/income-tax-employment-intermediaries-and-relief-for-travel-and-subsistence

    intermediariest&s.review@hmrc.gsi.gov.uk

    Outcome/ View: Subject to legislation

    The Umbrella model engaged by many would seem to need to change and adapt.  At the higher end of rates PSC models are perhaps more likely to be adopted. Umbrella organisations need to enact the new legislation and it may be opportune that contractors liaise directly with their Umbrella provider sooner rather than later, giving you more time to make an informed decision on how you wish to operate post April 2016.

    Please note, contracts with and payments from Morson to our umbrella providers are unchanged by this legislation and will continue as usual.

    As is usual, should there be a change in the model or company with which you are engaged on the current assignment, we would be grateful if you let us have as much notice as possible then we can ensure we can administer any changes within the given time period.

    In conclusion thank you for your continued support to our client projects.

     

 

 

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