New regulations being introduced by the government to clamp down on false self-employment could have a huge impact on the events industry.
On 6 April the Income Tax (Pay As You Earn, Amendment No.2) Regulations 2015 will be implemented, requiring companies deemed to be employment intermediaries’ by HMRC to provide quarterly reports on workers who are not paid on a PAYE basis.
Events crewing company Gallowglass has welcomed the new regulations, but say the regulations are bad news for agencies that avoid deducting tax and National Insurance Contributions for their workers.
The term ‘employment intermediaries’ applies to companies that provide services to clients and make payments to individuals who have supplied those services. The new regulations state that HMRC sees such workers as holding employment with the intermediary, and therefore their pay is subject to income tax.
Gallowglass Crewing MD Jonathan Sigsworth (pictured) said: “This will come as bad news for many agencies and suppliers that until now have avoided deducting tax and NIC for their workers. HMRC will be scrutinising these reports and querying why workers have not been subject to PAYE.
“We were the first and remain one of the very few labour suppliers in the events industry to have been operating legitimately. All of our crews have tax deducted and are offered pensions. We hope that this signals the end of the unfair commercial advantage that many crewing companies have enjoyed.”
The new regulations are likely to add a further administrative burden to crewing companies that routinely sub-contract staff from their competitors to fill shortfall in crew numbers on large jobs.
Sigsworth added: “Under the new regulations HMRC will class both of these labour providers as intermediaries, which means that both will have to submit reports on the workers supplied. The possible fallout from this is that either sub-contracting will cease because it represents too much admin, or companies will submit false information. Those that continue to sub-contract will have to raise their charges to cover their admin costs.
“Again, this change benefits companies like ours that exclusively use their own, fully-trained staff at all times. We are advising clients to give careful thought to event suppliers’ legitimacy, especially if clients are being asked to endorse supporting evidence destined for HMRC.”
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