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Thinking of switching from CIS to Umbrella Payroll? Read this.

The government has yet again announced a serious clampdown on false self-employment by the use of employment intermediaries.

Legislation coming into force in the next few days will impose further restrictions on self-employment within the construction industry. The government acknowledges that there are companies using intermediaries to hide the relation between them and their workers and mask it as self employment, mainly to avoid paying employers National Insurance and to reduce employers liabilities therefore not having to pay for holiday leave or other employment related benefits.

A consultation document posted on the governments webpage on this topic confirm that CIS which was initially set up in 2007 and welcomed within the industry but “has also been a driver for the use of intermediaries within the construction industry as a way of insulating contractors from the consequences of incorrect status declarations”.

It is clear then from the governments take on this matter that the slightest bit of doubt on an employers relationship with its contractor will be deemed fraudulent and hence attract heavy fines and penalties.

Ontime were one of the first to acknowledge this, so to accommodate the new legislation, we will carry on to offer our CIS services to those clients genuinely using self-employed contractors, however we are now offering an alternative, its our brand new Umbrella Payroll service.

Under our umbrella payroll service we will essentially employ your contractors, full fulling their employment rights such as holiday pay and sickness, not only that, they can also claim certain employment related expenses against their wages in order to reduce their taxable salary. We will then make the relevant PAYE deductions and pay their net wage to them.

This is a robust solution for contractors and agencies who might fall short of CIS obligations, so if you would like further information regarding our industry leading umbrella payroll service give us a call today on 0113 8267260.

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