Yesterday’s official ONS statistics once again show record employment rates with 76.3% of the UK’s workforce in employment, up 0.6% year on year and up 0.5% compared to the last quarter. Self-employment rose by 71k to 5m, which is equivalent to 15.2% of the workforce being self-employed, which is an all-time high. Whilst it is good news for businesses and the economy that so many people are choosing the flexibility of self-employment, the impact of forthcoming off-payroll legislation on the private sector remains to be seen. We are all too aware of the many situations where clients are making supply chain decisions to not engage PSCs, leaving the affected contractors no choice but to accept reduced income if they wish to continue working for their clients. And of course, right now there is no legal redress because clients do not have to provide any sort of dispute resolution process until after 6 April 2020.
People facing the likelihood of reduced income may well be tempted by tax avoidance schemes which are already aggressively targeting contractors with promises of unrealistic take-home pay, under the guise of supposedly HMRC approved / HMRC compliant schemes. It is fortunate therefore that many end-clients and recruitment businesses are insisting on FCSA accredited providers in their supply chain, so that they can protect their contractors from being duped into such schemes and also minimise their Criminal Finances Act risk of failing to prevent tax evasion.
No doubt anyone reading this newsletter will already be aware of the off-payroll legislation “review” that is underway. FCSA is actively engaging in this review which focuses on the implementation of the changes but does not seek to review the actual changes themselves. It seems to me therefore almost inevitable that the changes are coming in April, so any affected businesses that haven’t yet considered the impact must start preparing urgently.
Julia Kermode, FCSA Chief Executive
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