Ok, ok….. this is not without issues, nor is it conclusive to the full facts. However, what I can report and bring to your attention, more so as a ‘told you so!’
There appears to be a large number of outsourced payroll companies, that seem hell bent on pushing Limited Company services (PSC, DSC or whatever you wish to call them these days)
Don’t get me wrong, for the right circumstances, and the right freelance workers workload, these solutions work extremely well. However, I can’t help but see and feel that these are now being offered as a kneejerk reaction to a HMRC change in Travel & Subsistence allowances. This is an entirely different subject I am more than happy to address in another statement.
Pushing a Limited Company service to a worker earning close to National Minimum Wage or soon to be National Living Wage, is both immoral and ethically harsh. Agencies are being sold these services as RISK FREE is a blatant disregard of what the true meaning of an overarching agreement and contracts to support a temporary workforce whilst not only reducing costs to the agency, but to limit liability and administration under the newly crowned Supervision, Direction or Control legislations (or the right of)
If you want to keep your workers, then keep them within control of the assignments to which you provide these workers and the fulfillment of the obligations you have with your end clients. I am hearing and seeing volumes of contract workers moving to their own Limited Company, then being approached by the end client directly to continue the work first introduced by the agency. Simple math dictates that a charge rate to the end client of £15, equates to a £10 pay rate – now the end client has noticed and quickly realised, they can employ the services of a Limited Company worker, pay them £12, save £3 per hour and the worker increases their earnings. Sounds great ha? WRONG! Agencies will be forced to focus on Permanent placements, which contradicts the purpose and benefits of the countries 430,000 strong temporary workers.
Please note, we offer Limited Company services to hundreds of active contractors, however, we are not pushing this as a ‘magic fix’ for the changes to T&S.
Flat rate VAT schemes, guaranteed 5% saving on expenses and outrageously over marketed scaremongery are NOT the way our industry should be run. This MUST stop.
If you have been brainwashed, forced to sign a NDA or uncertain of what the future holds, please speak to us and we will provide a clear and concise explanation of the future post April 2016.