The Answer to T&S Reform Julia Kermode, Chief Executive Freelancer & Contractor Services Association

Salary sacrifice No SDC no T&S SDC no T&S No salary sacrifice No SDC T&S SDC no T&S

Likely Impacts Reduced income for workers Reduced workforce flexibility Skills shortages Widest productivity gap since 1991 Recent headlines – GP recruitment / shortages as Dr’s head abroad – Teaching crisis “pupils taught by untrained staff” – NAO: staff turnover & skill shortages re gvt projects

Liability Intermediary paying worker Worker if reclaim via SA / P87 Assumed SDC present – Need to prove absent Fraudulent documents

PSL Checklist Credit check Financial position Insurance and levels of cover Your contract with the umbrella Their contract of employment with workers Mechanics of expenses policy / new model Compliance accreditation

FCSA Compliance MUST be passed annually Independent Reviewers – Regulated accountants and lawyers Published Compliance Code Open Book with HMRC Non-profit, no shareholders CEO appointed by members

Not accredited Orange logo = FCSA accredited

What Else Should You Do? Assess workforce / SDC Client input SDC Communicate Know your suppliers WORK IN PARTNERSHIP

End-Client Intentions? Just 35% of hirers are fully familiar with the details of the impending T&S changes

Operations are significantly more conversant with the changes than HR

Just 8% employers plan to compensate all impacted workers with a pay uplift Question: What do you believe that your organisation will do as a consequence of the removal of existing T&S concessions for umbrella employees and PSCs/Ltd Cos?

Impact of increasing rates 75% believe negative impact Detrimental if we have a higher cost base. It could mean clients will cut back on engaging us. We may use fewer umbrella / PSC as a result. Small companies less able to compete.

Employers keeping pay same: negative impacts Workforce flexibility (79%) – It will reduce the quality of available people Business competitiveness (80%) – We will not be able to react quickly to needs Ability to attract and retain staff (86%) – In some cases we will lose members of the workforce

State maintained school and academy ‘ agency ’ expenditure 2014/15 £ 1.3bn State maintained school and academy ‘ agency ’ expenditure 2014/15 £ 1.3bn

Final Thought