The chancellor’s autumn statement included plans for a review of onshore self-employed intermediary models. HMRC is expected to publish draft changes to Chapter 7 of the ITEPA legislation, which covers intermediaries such as Umbrella Companies and personal service companies, and produce a consultation document on 10th December.
Sam Hurley, APSCo’s head of external relations, has responded to the proposed changes with caution. She said: “In simple terms the proposal is to remove the obligation for ‘personal service’, which is currently required for a contract to be considered an agency contract.”
She questioned the validity of HMRC’s assumption that large numbers of people are being treated as self-employed, whereas Ms Hurley believes that in reality they are simply being employed. The existing model, she said, remains appropriate for those who are genuinely self-employed.
HMRC, she continued, intends to tie onshore legislation closely to current proposals on offshore employment intermediaries. APSCo will await the Revenue’s draft guidance on this issue “with great anticipation”, Ms Hurley said, as “our members have been concerned for some time about the lack of clarity regarding whether personal services companies will be caught in this proposed legislation. Clearly, there is a time issue and members are going to need time to put in place the necessary processes to protect their businesses.”
Meanwhile, the MD of Hays UK & Ireland, Nigel Heap, welcomed the chancellor’s removal of NICs for under-21s. He said that this will help SMEs, which account for 60% of the UK’s private sector jobs, to grow their workforces.