1. Louise Rayner presents to RI - re T&S solutions
8 March 2016

2. Who are NumberMill Consulting?
“The Mill is a place of tradition and refinement, a firm of REAL PRACTICING ACCOUNTANTS, specifically focussed on supporting recruitment agencies utilising modern state of the art techniques and technology” “Consultants first”
COMPLIANCE CONSULTANTS
TAX SPECIALISTS FOR CONTRACTORS
IPSE IR35 Trained
BACK OFFICE SERVICES
Interim FD services
Pay/Bill/GP/Ma’s
Treasury/Banking
Payroll - Bureau
Umbrella
Acctcy Serv
Established by Louise Rayner FCCA, MBA Contractors
EX CFO Adecco responsible for 40,000 contractors Travel & Subsistence
EX Commercial Director Randstad Managed Services
RSM Tenon Head of Outsourcing
EX MD of a large umbrella
MBA Thesis “Developing commercial pricing in MSPs”
22-Nov-18
Umbrella illustration & discussion document

3. Compliance v Commercial Challenge
Unlike others we understand operational and practical challenges
We have pragmatic solutions
Transparent, honest
Clear on risk
Professionally qualified
Beware of meaningless indemnities!
22-Nov-18
Umbrella illustration & discussion document

4. 2 Pieces of Legislation Finance Act
S339 Finance Act 2015 Salary Sacrifice
- AMAPS (Authorised Mileage Allowance Payments) is outside of Salary Sacrifice rules (ITEPA 2003)
3.20 Employment intermediaries and tax relief for travel and subsistence – As confirmed at Summer Budget 2015, the government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company, where there is a right of SDC Supervision Direction & Control
22-Nov-18
Umbrella illustration & discussion document

5. T&S Legislation 9 Dec 2016 – SDC
3.20 Employment intermediaries and tax relief for travel and subsistence – As confirmed at Summer Budget 2015, the government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company, where there is a right of SDC Supervision Direction & Control  
PSC - The proposals have been amended so that those operating through personal service companies will only be effected by the new measure when the intermediaries legislation applies to the contract. Those operating through other employment intermediaries, will be effected when they are under supervision, direction or control in the manner they carry out their work
This MEANS ONLY IF CAUGHT BY IR35
22-Nov-18
Umbrella illustration & discussion document

6. MULTI SITE – ONE END CLIENT
The changes – Temporary work place rules
Based on the draft legislation with effect from 6 April 2016 the temporary workplace rules are changing where operatives are engaged via an intermediary where the manner of work is subject to supervision, direction or control.
Although the temporary workplace rules have additional complexities, a basic element of the pre-April 2016 rules is that a site cannot be a temporary workplace where it is reasonable to assume that the operative’s attendance at the site will:
last more than 24 months, or
comprise all or almost all of the period for which the operative is likely to hold the employment
As umbrella workers are usually employed by an umbrella company under contracts covering multiple short term engagements and sites, they are typically able to meet these conditions. – NMILL CAN REVIEW THE CONTRACTS
22-Nov-18
Umbrella illustration & discussion document

7. MSC Legislation Sec 688A ITEPA 2003
Treat ALL payments received by workers as income subject to PAYE and Class 1 NIC
Also
Transfer of Debt – If the debt is irrecoverable, the liability can be transferred up the chain
* This is the most aggressive legislation in that it makes Directors personally liable – though untested in case law
22-Nov-18
Umbrella illustration & discussion document

8. Existence of an MSC Provider
“A person who carries on a business of promoting or facilitating the use of co’s to provide the services of individuals Treat ALL payments received by workers as income subject to PAYE and Class 1 NIC
All 4 Conditions to be met:
PSC – the business wholly or mainly provides services of an individual to a third party client
£Amount – the individual providing the service receives the greater amount of the sums received
Employment Income – would be less than the amount received under paye
Must be an “MSC Provider” and that person must be INVOLVED with the Co.
22-Nov-18
Umbrella illustration & discussion document

9. RISK REDUCTION – The solution “LTD with Salary only ”
Exemption – IF ONLY PROVIDING LEGAL & ACCOUNTANCY SERVICES Professionally Qualified
IR35 Tests
PAYE AMOUNT – If no dividends are taken and only PAYE amount less legitimate expenses then it cannot be an MSC
22-Nov-18
Umbrella illustration & discussion document

10. SOLUTIONS SDC Contracts
Requires full review throughout contractual chain – Difficult
Multi site one end client Contracts and Practices
Carefully written contracts in chain – One engagement , multiple work sites
Worker Declarations/Agency Declaration
Worker sign up process
Expense portal and guidelines - Mileage only, Year end other expenses P87
Audits
PSCs
IR35
Genuine Accountants
MSC Legislation
22-Nov-18
Umbrella illustration & discussion document

11. NMILL SOLUTIONS Umbrella Expenses Multisite/SDC Employed £5, £15, £25
Umbrella Uplift
No Expenses
£ 9.99
CFS
Mutisite/SDC
Self Employed
8% Capped £25
CFS Uplift
£7.99
Limited
IR35/MSC
£95 plus Vat /mth
Limited Lite
£25/week plus VAT
22-Nov-18
Umbrella illustration & discussion document

12. Employed versus Self Employed
Employment Liability
Employment Liability Removed
AWR
Outside AWR
Minimum Wage & Expenses Restriction
N/A
Pensions
Holiday Pay
Other Statutory Costs
22-Nov-18
Umbrella illustration & discussion document

13. Limited Lite Contractual Chain & Funds Flow
Agency
Commercial Contract for the provision of worker services
NMCFS invoices agency services
NMCFS
Contract for Service – IR35
Over-arching contract of employment or Paye Contract For Service – subject to expense rules
PSC invoices NMCFS for worker services, PSC instructs permission to make payments into NMill ACCA client Acct as their professional adviser
PSC engages NM as a firm of ACCA accountants
PSC’s
Umbrella/CFS
Funds transferred
NMILL Accounting – ACCA Client Acct
NM Invoice the PSC for accounting services

14. Risk Reality Intermediaries fold Workers don’t get paid
Reputational issues
Debt transfers up the chain
Finance Officer Obligations and personal liability
Directors personal liability in MSC
22-Nov-18

15. Questionable Models
Multiple Directors in a PSC - TAAR 6/4/ VAT Group Risks, MSC Risk
Fixed Expense Umbrella –
.  It should be noted that this particular model has been ‘created’ due to HMRC’s redefinition of ‘salary sacrifice arrangements’ (discussed in our last newsletter).  This is not the same legislation as the travel and subsistence proposal (s339A).   Therefore is there is SDC (or the right) and it is not a multi-site end client then t & s cannot be paid regardless of whether the expenses are fixed or not.
22-Nov-18

16. How to minimize risk? Beware of meaningless Indemnities
Approved Supplier List – ACCA/ACAEW practicing certificate & 51% voting rights on technical matters
- IR35 Qualified IPSE - Contract Reviews
- Director background checks - Scripts
- Pheonix companies - Portals
- Retainer with agency specialist lawyers
- Top 4 sign off
- Recorded calls
Approved Models – Independent review
Audit – Paper work review
Mystery Shopping
OIL (Onshore Intermediaries Legislation)
Systems mandated controls;
Approved suppliers only on drop down lists
IR35 declarations
Chartered Accountants membership number
Beware of meaningless Indemnities
22-Nov-18