Businesses could be badly caught out by changes to the definition of supervision, direction or control (SDC) when they come into effect on 6th April, a seminar held at Barclays in Spinningfields has warned.
The proposed changes will effectively prevent huge numbers of independent contracting professionals claiming tax relief on the substantial travel and subsistence costs they incur on their journeys between their home and temporary workplace. Contractors employed through employment businesses or Umbrella Companies are expected to lose around one-third of their income as a result of the rule change, which will either substantially drive up their pay rates or deter them from providing their skills to businesses located outside their home locality.
Recruitment specialist Meridian Business Support urged companies to ensure their recruitment provider is fully aware of the proposed legislative change so that they are fully compliant. Meridian Business Support’s finance director, Jeanette Barrowcliffe, said: “It’s really important that companies who employ staff through a recruitment company ensure that the new legislation is being adhered to. At the end of the day it is ultimately their reputation that is on the line so it’s critical in terms of business protection.”
She added: “We are urging companies to truly partner with and understand the culture and practices of their chosen recruitment supplier and this was the message delivered at this week’s seminar.”
The seminar explained the reasons why companies should partner with their suppliers, with a particular emphasis on the impact of the government’s plan to remove tax relief on home-to-work subsistence for temporary workers.
Speakers included Kevin Green, CEO of the Recruitment and Employment Confederation (REC); Mark Smith, Head of EAME recruitment at Caterpillar; and Simon Whitehead, partner at HRC Law and a specialist in travel and subsistence changes for temporary workers and contractors.
Mr Green and Mr Smith both underlined the importance of building a successful relationship with supply chain partners through honest communication and trust, with Mr Green suggesting that companies sign up to the REC’s Good Recruitment Campaign.
The seminar concluded with the recommendation that businesses work now to collaborate with their recruitment partners to prepare for the rule change, gaining specialist advice where necessary to navigate the legislative alteration.
The plans are currently being challenged vigorously by flexible worker trade body PRISM, under the stewardship of its CEO Crawford Temple. PRISM is engaged in the tireless lobbying of MPs to raise awareness of the huge financial implications of the rule change for UK businesses and contractors. Umbrella Company employees wishing to support PRISM’s Yes2T&S campaign can do so by clicking here.