What is changing and who is liable for potential wrongful operation of tax relief What to do next as a Recruiter and other models you may see Free document to enable you to vet your supply chain

2. SURVIVING IN THE NEW WORLD.
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4. John Chaplin
Director
Direct Tel: +44 (0)20 7951 4654
Direct Fax: +44 (0)20 7951 9313
Mobile: +44 (0) 7767 274436
E-mail: jchaplin@uk.ey.com
Background
▶ John is an Executive Director in our Global Employment
Tax Services team and advises clients in respect of all
employee related matters
▶ He joined EY in 2011 and has nearly 30 years of
experience gained working for both HMRC and in the
profession
Skills
▶ John helps clients to reduce their employment costs,
increase the value of the reward packages offered to
their employees and control the risks associated with
employment tax compliance
▶ He brings a blend of technical knowledge, people skills
and a ‘can do’ attitude to every project he leads
▶ John advises clients on compliance issues and tax
legislation
Experience
▶ John has extensive experience leading projects for
clients ranging from small, family owned
businesses through to large, multi-national
companies
▶ He leads the team which specialises in advising
clients (whether engagers, agencies or service
providers) on their use of contingent workers
▶ John has implemented numerous salary sacrifice
arrangements for clients on a range of topics
▶ John regularly leads negotiations for clients
undergoing HMRC enquiries and advises clients on
best practice issues ranging from expense policies
to termination payments
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5. Oliver Weiss
Senior Associate
Phone: 02078145494
E-mail: Oliver.Weiss@blakemorgan.co.uk
Oliver advises both employers and employees in connection with various contentious and non-contentious employment issues.
Main areas of practice:
Oliver's expertise includes issues arising from the use of social media in the workplace, complex employment status and
discrimination claims in the employment tribunal as well as High Court claims involving the enforcement of restrictive covenants
relating to unfair competition and confidentiality.
Clients:
His clients range from large multinational plcs to medium and small enterprises. Many of Oliver’s clients are in the recruitment
industry, as well as the IT, charities and retail and leisure sectors.
Significant experience:
Recruitment: Oliver has particular expertise in the recruitment sector. He is a key member of the firm's Recruitment Sector Group
and regularly presents at industry events, such as those organised by the Association of Professional Staffing Companies (APSCo).
Employment: He advises staffing companies and umbrella companies, as well as end user clients of staffing services, in relation to
a range of employment and commercial matters such as employment status and TUPE.
He has advised on complex Employment Tribunal matters, such as discrimination and status, as well as matters involving the
breach of covenants and misuse of confidential information by former employees. He has advised on complex and high value
employment status cases involving HMRC and the GLA.
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6. Rawdon James
Director
Direct Tel: 01489 667833
Mobile: 07796 955959
E-mail: rawdon@clearpoint-legal.co.uk
Rawdon is the Director and owner of Clearpoint, a legal consultancy which
provides employment and commercial law advice to clients across all sectors
of the recruitment industry.
Prior to establishing Clearpoint, Rawdon worked in-house for Randstad
between 2008 and 2013, heading up the legal team for their Construction,
Property & Engineering and Aviation divisions in both the UK and the Middle
East.
Rawdon trained and qualified as a Solicitor at Randstad, undertaking
employment and commercial secondments at Shoosmiths LLP and Charles
Russell LLP.
He is also qualified to practice in the United States, having been admitted as
an Attorney at Law in New York.
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7. 7
Claire Spencer
Tax Director
Direct Line: +44 (0)161 830 4167
Mobile +44 (0)7764 793822
E-mail: Claire.Spencer@rsmuk.com
Claire has been practicing tax for over 10 years and after qualifying as a Chartered Tax Adviser at a Big 4 firm of
accountants she moved into industry. Following eight successful years in industry with large corporates,
managing their complex tax affairs, Claire has recently moved back in to practice at RSM.
Most of her roles have been newly created in-house roles for large corporates where it was necessary to create
a distinct in-house tax function and implement an infrastructure for the business to operate compliantly in the
UK and internationally. This involved resolving existing issues and preventing future issues through internal
controls and management. Immediately before joining RSM, Claire was Group Tax Manager at Morson Group,
which is a £750m turnover business. At Morson, she designed and implemented an international infrastructure
and helped manage the creation of 5 new overseas entities, along with providing training for the businesses in
respect of what was required to run each entity compliantly.
In the UK, Claire managed all of the Group’s tax affairs including corporate, VAT, transfer pricing, PAYE and all
other areas of tax. Working very closely with the board, she was involved in most of the strategic decision
making, identifying relevant opportunities and threats and also ensured that the businesses operated
compliantly in all tax jurisdictions. Claire enjoys working in partnership with her clients to thoroughly
understand their businesses, in order to deliver relevant, practical advice.
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8. 88
Karen Weston
Senior Manager
Direct Tel: 0121 445 6178
Mobile: 07775 441 561
E-mail: karen.weston@aspirepartnership.co.uk
Karen worked for 20+ years in what became known as the Department for
Work and Pensions. During that time she worked as a specialist adjudication
officer, interpreting the complexities of social security legislation and
managing the HR issues of large teams of disillusioned civil servants.
Having finally found the exit she joined Aspire in 2009 and concentrates on
the HR, tax and contractual aspects of the temporary labour market for
Aspire’s client base which includes end user clients, agencies and umbrella
companies.

9. Bridget Wood
Consultant
Direct Tel: +44 20 3321 7816
E-mail: bridget.wood@mishcon.com
Bridget is a Consultant in the Recruitment Services Group in the Corporate department at Mishcon de Reya.
She specialises in advising recruitment companies, clients of recruitment companies, umbrella companies and
other intermediaries on a broad range of recruitment sector specific matters.
Bridget advises on the recruitment industry regulatory regime (The Employment Agencies Act, The Conduct of
Employment Agencies and Employment Businesses Regulations and The Agency Workers Regulations);
recruitment process outsourcing; TUPE; terms and conditions of business for permanent recruitment;
commercial contracts for temporary assignments; the recovery of introduction and temp-to-perm fees; tax law
specific to the recruitment sector; tenders; Employment Agency Standards Inspectorate audits and
investigations; and agency workers and the status of atypical workers.
Bridget is recognised in the Legal 500 2014/2015 for her "human resource outsourcing expertise".
Mishcon de Reya is one of the few law firms in the UK market with a specialist team focussed on Recruitment
and provides sector specific advice to recruitment businesses. The team is made up of recruitment specialists
from corporate, employment and litigation practices and acts for numerous high-profile recruitment clients on
the most important matters they face. For more information on the Mishcon Recruitment Services Group,
please visit http://www.mishcon.com/recruitment.
If you have any questions, or if you would like to find out how we can help you and your company, please
contact Bridget Wood on +44 20 3321 7816 or bridget.wood@mishcon.com .
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10. Julia Kermode
Chief Executive
Mobile 07584 048930
E-mail: julia.kermode@fcsa.org.uk
Julia Kermode joined the Freelancer and Contractor Services Association
(FCSA) as CEO in April 2014. She has 15 years of experience and expertise in
association management, representing members and lobbying for their needs
to be considered by policymakers.
In particular, Julia is a strong advocate for role of the flexible workforce in
economic recovery, and ensuring that Government recognises the value of
freelancers and contractors.
Notably, she successfully highlighted key issues through a 20 minute speech
in the House of Lords, delivered by Lord Palmer of Childs Hill on 10 November
2015. Given the raft of changes and political developments set to impact on
the contractor management sector, there is still much work to be done!
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11. Regulations over the years
2003 – Agency Conduct Regulations
2007 – Managed Services
2011 – Agency Worker Regulations (AWR)
2014 – Offshore Intermediaries Legislation
2014 – Onshore Intermediaries Legislation
Auto Enrolment
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12. What does an umbrella do?
Employment Checks
Onboarding / P45’s
Provides continuous employment across multiple assignments & agencies
End of year reporting (P60 & P11D’s)
Weekly payroll & communications (3000 SMS & payslips per week)
Auto-Enrolment obligations
Employment claims (ET1 forms)
Processing of tax relief Only when SDC does not apply!
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13. T&S Changes
From 6th April your affected contractors will notice a
reduction in net pay, so you may want to be on your
Easter break!
Better understanding required as to how your clients
interact with your candidates and how you communicate
this to the umbrella company. – (SDC status)
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14. Pay Illustration Before &
After
Illustration based on:
40 hours x £12 per hour
Advanced Holiday Pay
1060L Tax code
Existing 7th April
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15. Implications / Who is liable
Onus on umbrella company to prove SDC not applied for
assignments. So be prepared to confirm either way as
our default will have to be that SDC does exist unless
otherwise informed.
How?
Assignment schedules
Contractor Questionnaire
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16. THE END OF
FREELANCING?
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17. Key changes
► Intermediaries legislation 6 April 2014
► Quarterly reporting from 5 August 2015
► T&S changes from 6 April 2016
► Relevant salary sacrifice rules
► Supervision, direction or control “in the manner”
► IR35 discussion closed on 30 September 2015
► Expectation for a formal consultation early 2016
► Changes from April 2017?
► Transfer of debt to agencies/end engager?
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18. Engagers/End Clients
Reputational Risk
Transfer of liability?
Reporting requirements
Service Providers
Need to ensure worker is paid via
the correct business model
Transfer of debt liability
Evidential requirement to support
decision
Reporting requirements and
associated penalties
Due diligence requirements from
clients further up the chain
Employment law risks
Potential risks/concerns
Agencies
Reputational risk
Transfer of liability?
Unfair competition from those who
are not risk averse
Reporting requirements (and
possible extension of these)
Evidential requirement to prove a
negative (disprove the
presumption)
Do I provide any documentation?

19. What you need to do/consider
► Keep up to date with guidance and legislation
► Choose your business partners carefully
► Consider how you evidence the status decisions you or those
further up or down the chain have arrived at
► What policy or process have you implemented to support/evidence
your decisions, are they reasonable and in line with legislation and
case law
► What due diligence processes will/may be required from you and
what you require from others
► Change how you work with your supply chain?
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20. The better the question. The better the answer.
The better the world works.
Summary

21. OVERVIEW
Recap
Who is liable?
What should recruitment companies do to mitigate risk?
Timeframes
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22. RECAP
If enacted as drafted, the new T&S expenses legislation will prevent many
workers engaged through an employment intermediary from claiming tax free
reimbursement of home-to-work T&S expenses.
Unless it is shown that the manner in which the worker provides the services is
not subject to (or to the right of) supervision, direction or control by any person,
the new rules will apply where:
 the worker personally provides services to a client (which are not services
provided wholly in the client's home); and
 the services are provided not under a contract directly between the client and
the worker, but under arrangements involving an employment intermediary.
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23. WHO IS LIABLE?
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Entity with the primary obligation to comply is the "employment
intermediary".
Defined as "a person, other than the worker or the client, who carries on a
business (whether or not with a view to profit and whether or not in
conjunction with any other business) of supplying labour".
Documentation accompanying the draft legislation states that an
employment intermediary would include an umbrella company, a PSC or
a recruitment company.
If you are a recruitment company engaging workers via an umbrella
company, the umbrella company has the primary obligation to comply.
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24. WHO IS LIABLE?
Recruitment companies that engage workers via umbrella companies are only
at risk in limited circumstances.
If:
 the recruitment company (or the end user client), provides the
employment intermediary with a fraudulent document that is intended to
constitute evidence that the manner in which the worker provides the
services is not subject to (or to the right of) supervision, direction or
control; and
 the employment intermediary relies on this evidence to reimburse tax free
home-to-work T&S expenses,
the provider of the fraudulent document must account to HMRC for the unpaid
tax.
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25. WHO IS LIABLE?
Fraudulent intent is difficult to prove.
The giver of the statement must know it is untrue or be reckless as to its truthfulness.
Subjective test relating to actual knowledge and state of mind of the giver of the
statement.
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26. WHAT SHOULD RECRUITMENT
COMPANIES DO TO MITIGATE RISK?
Consider the potential impact of the removal of home-to-work T&S expenses tax relief
on workers whose services you supply.
Review preferred supplier list of umbrella companies.
Educate clients.
Improve flow of information along the supply chain. Need to establish whether or not
the manner in which the worker provides the services is subject to supervision,
direction or control.
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27. TIMEFRAMES
Closing date for comment on T&S expenses sections of the draft Finance Act 2016:
Wednesday 3 February 2016.
Sections in their final form will come into force on 6 April 2016.
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28. Solutions
How will one of the UK’s few FCSA compliant umbrellas continue to
deliver services to you and your candidates?
* Outsourced PAYE payroll – No risk
* Personal service company – No risk to agency
Please speak with a member of the team to find out how we can work
Risk – Liquid Friday No Risk Onshore Risk - Agency
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29. Potential bespoke solutions as exclusive
agency partner.
Direct engagement model.
Liquid Friday and staffing company roles feel the same. However, the contractual
arrangements change.
No intermediary / agency worker regulations.
Potential savings if the end client is VAT exempt.
Talk to us if you feel that this could be appropriate for your business.
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