Autumn Statement 2014

Thank you Mr Osborne for including in your Autumn Statement this week a promise to work closely with providers of Umbrella services to UK contracting professionals.

Like other providers operating firmly at the compliant end of our industry, we are excited to have this opportunity to work with Government via the forthcoming discussion paper and we will take an active role at every opportunity.

In safeguarding employments rights, protecting national minimum wage and operating within a strict code of ethics and compliance, Umbrella Companies of quality and integrity have long played an important role in facilitating the flexible workforce so vital to our economy.

I am delighted that the Chancellor has recognised this in his Autumn Statement and is clearly looking to engage directly with us in better understanding this.

For too long more dubious operators have been allowed to damage the good name of the Umbrella service industry by seeking to abuse employment contracts and national minimum wage legislation in order to offer inflated and inappropriate levels of tax avoidance.

I hope and believe that the discussion paper and the resulting dialogue that will follow Mr Osborne’s announcement will finally put pay to their practices and usher in a new era of understanding.

We very much look forward to working with the Government, Treasury, HMRC and the Office for Tax Simplification.

Colin Howell
Chief Executive Officer
Unitum Group

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Tribunal backs overtime in holiday pay

A ground-breaking case at the employment appeal tribunal ruled that holiday pay should also take in to account overtime worked.
This means that some people working overtime could now claim for additional holiday pay as currently only basic pay counts when making holiday payments.
Initial worries were that backdated claims would go back years and cost employers and potentially crippling business but the tribunal ruling also said that employees cannot claim more than three months after the last incorrect payment.
Most employers offering flexible working hours will not be affected as holiday is usually calculated based on the last 12 weeks’ hours worked but businesses operating a strict overtime policy would need to review their policies and adjust pay accordingly.
One employer responded to the BBC News website saying that with more and more legislation preventing business from making a profit I may well bring forward my retirement plans. I am sure he is not alone as once again people with ambition and courage to set up businesses are being penalised for success and providing work.
However, we must also acknowledge that there are also unscrupulous employers who will also take advantage of old rules and only offer a small number of hours as basic pay and therefore quite rightly should now be liable to holiday pay on the actual hours worked.
Umbrella companies usually process holiday pay in line with the hours worked and would not be affected by this ruling.

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HMRC Issue New Guidance For Onshore Legislation

HMRC has issued new guidance for the reporting requirements of the new Onshore Legislation, however, they are not clear.   The guidance can be found via

Recruiters are advised to review this to ensure that they will be able to report the information required in readiness for April 2015.

I am sure most of the information is readily available but the most important question is still based on opinion.  Bearing in mind the legislation is now in force this is something recruiters should be addressing. As an innovative provider Unitum has invested significantly in professional and legal advice and has developed a status questionnaire which can be used to assist with determining whether a worker is subject to direction, supervision and control at their workplace. This free service is available on our new website  feel free to check it out and feedback is always welcome.

If you are a recruiter and wish to receive the results on the questionnaire please get in touch via the website and we will happily set this up for you.

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Everything Changes for Gary Barlow

Following on from my previous blog about Gary Barlow I am pleased to say that he has appointed new accountants and is looking at a settlement with HMRC for misuse of tax avoidance schemes.

The Take That star invested money through a company called Icebreaker which was said to be set up to support the music industry but a tax tribunal judge ruled that they had actually been set up for tax avoidance purposes.

HMRC has been targeting these so called tax breaks, and will use all its power to close them down and to be fair they have been gaining traction and winning several cases now.

Some MPs were calling for Gary to give back his OBE which I think is a step too far.  Pay back the money and any penalties and I am sure it will all be forgotten.

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Employee Benefit Trusts Targeted

Employee Benefit Trusts (EBT) remain within the spotlight as yet another scheme is closed by a tribunal. It is clear now that these schemes don’t work and HMRC is using its power to shut them all down.
In the past the scheme administrators were re-establishing themselves time and time again but in this latest tribunal the scheme administrator has also been made bankrupt.
The treasury has confirmed on their website that HMRC will always challenge this type of tax planning and the latest tribunal decision sends a clear message to all NOT to get involved.
I feel this is long overdue and about time giving clarity to an uncertain area that is still marketed heavily offering excessive net returns of 90%.

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The Office of Tax Simplification (OTS) Reports on Employee Benefits

The office of Tax Simplification (OTS) has published its latest report on employee benefits and hopefully the recommendations will be adopted by HMRC.

The areas OTS are looking at are accommodation benefits, termination payments, removal expenses and long service awards although other items like mileage needs addressing.

I think the accommodation review is long overdue and will help workers understand the complex rules where employers provide short term accommodation, especially for overseas workers coming to the UK.

I welcome the work the OTS does and its objective to try and remove red tape and simplify our tax system can only assist small and medium businesses who cannot afford tax experts.

The report is being treated as a consultation and encourages people to contribute – view report

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