HMRC is cracking down on “False Self Employment”
HMRC employment status challenges are getting to be pretty big news at the moment as the government looks to recoup more than £1.5bn per year that it believes is being lost to “false self employment”.
Data released by the Office for National Statistics this summer showed that 4.7m people were classified as self-employed across the UK in the first quarter of 2016. Self-employment grew during the economic downturn, at the same time as government budget deficits spiked and austerity policies were introduced.
If the government can convert just one in 10 self-employed workers to employee status, and if these were earning just £500 per week each, it would receive an extra £1.5bn per year in employer national insurance contributions alone.
Meanwhile trade unions are keen to see more workers classified as employees because of the legal benefits of employment rights. Financial secretary to the Treasury Jane Ellison wrote to Labour MP Frank Field in October saying the government took false self-employment “very seriously”.
Download our White Paper
Produced in partnershi[p with Construction News this white paper provides all the practical advice you need to successfully withstand the scrutiny of an HMRC employment status investigation, avoid unnecessary liability costs and enjoy the sense of security that comes with the knowledge of full compliance.
Be confident in compliance with RIFT Legal Services
We will ensure that your company is fully compliant with all employment status legislation and protected from any employment status challenges.
Working on a consultancy basis, RIFT Legal Services specialists analyse working relationships and use their expertise and knowledge to advise on the correct classification of workers to best suit the needs of all parties.
We ensure that employers have the right contracts and other documentation in place and handle any HMRC status enquiries for clients, becoming the point of contact for the HMRC’s inspectors.
Join us at our free breakfast seminar, presented by RIFT Legal Services Director Kye Burchmore, on the topic of “how to protect your business from HMRC challenges” on 23rd Feb in our offices in RIFT House in Ashford, Kent. Places are limited so booking is required.
It’s time to review how you engage sub-contractors – or pay the penalty.
Our complete services, from audit to indemnity, offer total protection to businesses and agencies should HMRC challenge or seek to reclassify the status of your self-employed workers.
Changes made to legislation two years ago could soon have major implications for companies in the UK, especially those in the construction sector that rely heavily on a self employed workforce.
Amendments in 2014 to Section 44 of the Income Tax (Earning and Pensions) Act 2003 could leave firms with huge bills for workers they have treated as self-employed.
As working status investigations take a long time to conclude, and many get settled pre-tribunal, there is a false sense of calm about any serious implications arising from these legal changes. But with trade unions, the Office of Tax Simplification andHMRC all highly motivated to tackle what is often termed ‘false self-employment’, and with politicians and the media increasingly drawn to the issue, it is critical for companies in the industry to be prepared.
We will provide all the help and support you need to look in detail at the employment conditions and circumstances of all your workers. The key to surviving the renewed challenge to employment status is to make sure you are confident about the reasons you do not count workers as employees and understanding the finer points of case law and how it can be used it to challenge an employment status decision.
Our experts are here to help you understand the motive and means for a major employment status crackdown by HMRC, the potential risks, costs and consquences, and how you can protect your company.
A simple, safe solution.
Employment status enquiries look set to increase, and these can represent a major burden. In the experience of RIFT Legal Services, it takes more than two years for the average status enquiry to be resolved, with defence fees reaching £20,000 in some cases. Unsurprisingly, drawn-out legal processes such as this can have knock-on effects on construction businesses.There is a substantial administrative element which can be costly and the risk to reputation as partners, suppliers and workers jump to unwarrented conclusions on hearing an HMRC enquiry is in progress.
Every day, RIFT Legal Services helps all kinds of companies to negotiate the pitfalls of this increasingly complicated area of employment:
- We’ll analyse your business and provide bespoke advice
- We’ll ensure the correct contracts and documentation are all in place.
- We’ll act as the point of contact with HMRC should any employment status challenges be issued.
- We will construct the best possible defence to any HMRC challenge.
- If we’re unsuccessful, we’ll pay thenational insurance liabilities. There is no risk to you.
RIFT Legal Services is well placed to defend construction companies against such reclassifications. We work with firms on a consultancy basis, analysing working relationships and using its experience and knowledge to see where and how a non-employee status could be maintained and defended – as well as advising when a worker truly should be employed for everybody’s benefit.
We’re so confident of our services and expertise, that we offer a RIFT Legal Services Guarantee: We will pay any penalties or liabilities should HMRC successfully challenge your employment status.
Leading the Industry.
Get the financial certainty and peace of mind that comes with securing your workforce’s employment status along with full legal indemnity should HMRC successfully challenge your position.
Our extensive experience of successfully defending HMRC disputes and expertise in case law means we know how HMRC target companies, their tactics and the best ways to successfully defend the challenge.
Our unrivalled industry knowledge and relationships with HMRC, employers and unions means we anticipated that 2016 would be the year that businesses would need practical help with the regulations around employment status and agency legislation.
We’ve built a specialist team at RIFT Legal Services with an in-depth, practical understanding of the legislation from all angles due to their varied backgrounds which include ex-HMRC status inspectors, litigators, through to tax and employment law professionals. With 40 years combined experience in defending HRMC challenges and successfully representing clients at tax tribunals under their belts you can be sure you’ll be in safe hands.
About RIFT Group
RIFT Legal Services is part of the RIFT Group, established in Kent in 1999 and now the UK’s leading tax refunds expert with over £135 million in tax refunds claimed. We are also specialists in Accounting, Research & Development Tax Credits and Capital Allowances and our complementary services are designed to deliver real financial benefits.