This is a series from Jovan Pavlicevic (commercial director at forest accountants) to help understand what April 6 has in store for recruiters. You can catch the other articles as follows;
– number 5: LLP Salaried Partner Rules here
– number 4: Onshore intermediaries
– number 3: Offshorr intermediaries
Here’s the final concern: #1 Debt transfer
End clients worth their salt will hold compliance as key. Nothing new here. But what about their suppliers (agencies) and the agency’s suppliers? Are
they exposing the rest of the chain to risk?
Starting with the new tax year, debt transfer provisions are being introduced. In certain circumstances, where an umbrella company (for example) gets it horrifically wrong and builds up a huge debt, there’s a
provision for this debt to be passed on to the agency, and if the agency can’t withstand that cost, it’ll be passed on to the end clients. HMRC knows that the end clients are the ones with the shop windows, who won’t just
liquidate when faced with a tax bill. The debt transfer will make sure end clients are tightening the screws on their agencies, and the agencies in turn will put pressure on their suppliers to make sure risk is not being stored up. Barclays cutting rates to 12,000 contractors by 10% is just the start of major shift in the flexible labour market.
There’s a lot more detail, but a great place to start is to ensure you’re working with well qualified suppliers and partners. For further detail on what the new tax year is bringing, you can reach forest on 0845 459 4099.
