APSCo has responded to the chancellor’s budget pledge to clamp down on “agencies and Umbrella Companies who abuse tax reliefs on travel and subsistence” with a robust note of caution: do not presume that the practices of rogue intermediaries operating with low-skilled, low-paid workers represent those of Umbrella Companies in the professional sector.
Sam Hurley, APSCo’s head of external relations, noted that the budget report referred to “restricting tax and subsidy relief for workers engaged through an employment intermediary” if it could be shown that he or she was under the control, supervision or direction of the client.
Government officials, Ms Hurley continued, may therefore apply a similar test to the existing one for determining the workers’ tax status for tax purposes, which suggests that the government has taken heed of the overwhelming rejection by the industry of its original proposals to wholly abolish tax subsidy relief for all workers employed through intermediaries.
Ms Hurley described this as “a more positive outcome for the recruitment sector” but said that APSCo would reserve judgement until an official consultation occurs.
Addressing the chancellor’s remarks about wanting employment intermediaries to provide workers with more transparency on how they are employed, Ms Hurley added: “APSCo has previously confirmed to the government that it does not believe that this is an issue within the professional sector, and we would not want to see our members burdened with more unnecessary red tape to comply with regulation aimed at protecting potentially vulnerable workers. I would imagine that a consultation from BIS on this may well form part of its proposed changes to the Conduct Regulations.”