The Gabem Blog:
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Hello everyone, Sarah here with some payroll news to help kick off the new year with a little excitment.

There has been much to-do in the media this week regarding an outbreak of tax code amendments for the new tax year, starting in April.

It is being said that when HMRC brought in big improvements to their systems in July 09 there have also been some unwanted side effects. The media are reporting that ‘old’ employment records, where P45s have been issued and the employment has ended, are sometimes being shown as still ‘current’. This can lead you to be in several employments at once. Where this has happened HMRC have followed their normal procedure and either split tax free allowances across all employments or put all the allowances on just one employment record and have applied either a basic rate or higher rate tax code to the other. If, by chance, your allowances are on your ‘current’ employment you may not lose out but the real risk is that you don’t get the benefit of all the allowances you are entitled to and could then pay too much tax. It also could have the effect of making you look like you are earning more than you actually do, not something that you would wish HMRC to think.

We have already had queries from a few people that have received two coding notices so it is certainly occurring but it is too soon to tell how many people this will affect. The general advice is to closely check any documentation you receive from HMRC and, with the current carry-on, do so as soon as your receive it.

If you receive just one coding notice ensure it quotes ‘Gabem Management Ltd’ as your employer. If there is any change in the code, either up or down, the reasons why will be listed. If you disagree with any of them you should ring HMRC, using the number on the letter, and query it with them. There is still plenty of time to get it sorted before the new code comes into action so no need to be overly worried but dealing with this sooner rather than later is best.

You may receive two [or more] notices and this may be correct if you have another job or a pension etc. Again, check the details carefully and contact HMRC if you disagree with anything. However, if the press are right a lot of you may well be receiving 2 notices, both quoting Gabem. One will say ‘Gabem Management Ltd’ and be from the Salford office quoting a tax reference starting 951, the other will probably be for the Gabem company you were with before October 08, so something like‘Gabem 545454 Ltd’ with the numbers in the middle varying for each individual. This will be from the East Kilbride office with a tax reference starting 334. All Gabem employments for companies that were registered at East Kilbride/334 have ended and had P45s issued, the majority in October 08. In this case you should ring the East Kilbride office and confirm your current employment details, if you are using Gabem’s umbrella service now you are an employee of ‘Gabem Management Ltd’ and your tax reference is 951 G7008. HMRC will then be able to make sure their records are correct and up to date, issuing a new coding notice if necessary.

If HMRC have issued a new notice for you this will also be issued to Gabem, usually sometime during February or March. Don’t worry if you have sorted out any confusion and had a corrected coding notice issued. Only the newest will be applied when the new year starts in April.

I hope this helps you sort out any kerfuffle.

Sarah
@GabemUmbrella
29/01/2010

Happy New Year! A bit late I know but the snow has been making things quite interesting and as a result I've been forced to concentrate on other things.....

Well it wasn't all work related.

The snowman was actually made during a morning break by Gemma, the person responsible with keeping all of our training up to date. He later received some "modifications" at the hands of Lisa (who some of you may have spoken to) that could only be described as juvenile but very funny. Don't expect to see pictures of that any time soon.

The snow hasn't actually been that big an issue for us compared to a lot of businesses because a lot of people here are lucky enough to live close to work. Those of us living further away even managed to make it in late but I think we had a reasonable excuse.

Everyone here seems pretty positive about what the new year will bring, 2009 was a tough year for the industry but ultimately satisfying for us because numbers continued to rise and CIS & Solo, our self employed services, really came into their own. We're hoping for an easier 2010 for everyone, contractors, agents and freelancers in general.

Here's to hoping 2010 marks the end of economic troubles and a bumper year for contracting and employment.

Hugo
@GabemUmbrella
13/01/2010

So Christmas is finally upon us, diets are on hold, and everyone is looking forward to a little of indulgence with their family.

For those of you working next week, we will be here Tuesday to Thursday, and look forward to hearing from you (because as is always the case the week between Christmas ane New Year the phones will be quiet).

From everyone here at Gabem, we hope you have a fantastic and relaxing Christmas. Look after yourselves and have fun.

Hugo
@GabemUmbrella
24/12/2009

It's Wednesday the 16th of December and 9 days to go until the big day and I am still Christmas shopping. So far I've managed to do all of it over the internet, even the wrapping paper. I know I may have to resort to the high street at some point but it's nice to do these things electronically if you can.

With that thought in mind we have created an excel version of our expense form to take away the more repetitive aspects of expense submissions. The rest of our expenses policy doesn't change, we do still need original receipts and a signed hardcopy of your form, this is just here to stop you having to fill in the same details over and over. We have a few ideas in the works that should make expenses much easier to submit, but that's in the distant future. I will keep you updated as I get news.

A while back I mentioned that this year instead of sending out Christmas Cards we were going to donate money to charity, and asked you guys for suggestions of which charities you would like us to support. We settled on Save the Children, Cancer Research, Help the Aged, and the Construction Industry charity "The Lighthouse Benevolent Fund".

The last two years have not been great for charities, as in many cases they have been the first to suffer in the recession, so I hope this year other people have followed suit and made a donation instead of mailing.

I've been asked to mention holiday pay again because we are getting a few calls from people unsure of if their agency will be open to make payments over the Christmas period. I would encourage you to take a look at their opening hours or better yet payroll schedules, if there is any ambiguity remember that if you have holiday pay accrued we can pay it out to you as long as we know in advance.

Hugo
@GabemUmbrella
16/12/2009

Well the pre-budget report has come and gone with no real surprises, the focus was predictably on clawing back as much money as possible without upsetting anyone in the private sector that wasn't a banker hoping for a large bonus.

The key points as far as we are concerned are:

- Banks are being taxed 50% of any bonuses they issue exceeding £25,000 between now and April the 5th, the net result being that bankers will be receiving either 33% less of a bonus, or everyone is just waiting for April 6th.

- The higher rate of tax will be frozen, so they will catch a few more people because of inflation.

- Employees and Employers NI is being raised half a percentage point.

Most of the changes are due to take place in 2011, making the whole thing a bit of a moot point because of the general election that has to happen between now and then, and things might be changing.

The Employees and Employers NI is the one that will effect most of us, and although it's not pleasant, it's certainly not as bad as it could have been considering the recession as a whole. For those of you in construction though our umbrella company there is even a little silver lining in the form of the CIS holiday pay scheme. Due to the NI increase you'll now be saving more each week giving you a little more to spend whenever you want to take time off. And for those of you in construction who don’t use Gabem yet call us for details of how to take advantage of our services.

Hugo
@GabemUmbrella
11/12/2009

One of the many positive things that came out of the Quality of Service Questionnaire we ran in June was that people liked our independence within the industry, and that they could be sure that when they joined our umbrella company that their details weren't leaving the Gabem offices.

We found this a little surprising as perhaps naively we had assumed that most umbrella companies were behaving in a similar fashion. I took upon myself the task of doing some background research on a random sampling of companies to see what I could find.

I'm going to come right out and say that from what I could see most companies had no obvious or unexpected links to other bodies in the contracting industry, so most of you can breathe a sigh of relief. That said a few companies had some very eye opening relationships, I'm not going to name names, but there were companies sharing private server space with recruitment firms and jobs boards, and other businesses catering to contractors.

It's not a cardinal sin of course, but it is one of those things that could compromise the impartiality of a service or mean you have to put up with additional marketing mail or calls. I can assure you that it's not a road we're going to go down, but it has been eye opening seeing what everyone else is up to.

Yours independently

Hugo
@GabemUmbrella
04/12/2009

The Christmasy people have finally been given the go ahead to turn on their lights and their music. A little early if you ask me but they seem happy and I suppose that's what counts. It couldn't happen soon enough for Susan who I suspect has had her tree up and decorated since early November.

Our Christmas promotion is still running - but ends soon - so if you know anyone looking for an umbrella company who would appreciate a £50 gift voucher point them our way. They might not be able to spend them in time for the lead up to Christmas, but it could be very handy for the January sales.

Sticking with the Christmas theme, our Christmas Opening hours are now up for your viewing pleasure. As you can see we're open as usual up until Christmas eve, and the following week we're working reduced hours (which are very welcome).

I have been asked to remind you that if you're one of our umbrella employees and are planning on taking some time off over Christmas, it's a perfect time to request your holiday pay because you'll have full tax and NI free allowances to be applied to it, meaning you'll take home more than if you took it in a week when you were being paid. Somewhat more importantly, holiday pay does not carry over each financial year, so if you don't take it before April it's gone, so the sooner the better really.

Hugo
@GabemUmbrella
03/12/2009

As you may or may not be aware the umbrella company industry is pretty competitive, it always has been. After 10 years you come to welcome the challenges and changes that the business throws at you. With the credit crunch things got tougher, but our numbers have continued to rise despite playing fair so we're pleased to be ahead of the game.

Just recently though things have gotten a little more intense with the competition feeling more one on one; whether we are or not is another matter. This has it's good and it's bad points, the good being that you try that little bit harder, and it forces you to look at your strengths and weaknesses, the bad being that it can be tempting to point out other companies bad points rather than our own good ones, we won't do it but the temptation is there.

One of the sticking points for contractors and agencies that keeps cropping up is price. As you're hopefully aware we take £22 per week, and have done since the umbrella companies started back in 2006 (if you can remember as far back as I can, we were charging £22 for our composite company service in 2001). £22 is beneath the market so you would assume this puts us in a pretty good position. Unfortunately this isn't always the case, and that's solely down to the fact we advertise our costs as a gross figure..

The gross fee is really the only fair representation as it's static. it's not going to change person to person, and it can't be manipulated to make it look better. Net fees are essentially just a gross fee minus the PAYE tax a person would have paid on that amount, so it's always lower (for a higher rate tax payer our net fee comes out at around £11.31). In addition due to the fact that people pay different amounts of tax it can fluctuate a fair amount making it just inaccurate.

It would be the easiest thing in the world for us to change the marketing stuff, but it would mean intentionally misleading our customers.

Hugo
@GabemUmbrella
20/11/2009

Each time a new consultation document comes along people always want to know one thing "What are we going to do about it?"

We'd love to give you an answer, but it's never as simple as that. The first problem is that we're dealing with a consultation document, so it's likely that the initial proposition will change (it certainly did with the MSC legislation, but I'll come back to that later), so a definitive answer is impossible. We will already have made our feelings known, either directly or through our advisors - people like KPMG and Alan Nolan of Aspire Business Partnership. Then it's a matter of waiting for feedback and planning for a variety of scenarios.

We're very lucky to have the advisors we do because their experience and as a result contacts keep us very well informed of what the general feeling is about any consultation that may affect you. It is only the general feeling though, ultimately we have to wait the same as everybody else until the consultation document is released to the public.

The Agency Workers Directive document has only recently been released, so Wole our resident lawyer and our advisors have been ploughing through it. I really don't envy them as it's 170 pages of legalese, but it's the only way to know where we stand. We should be able to let you know very soon how or if it will affect you.

The MSC legislation is a great example of how these things can change a lot over time. When it was first announced we responded to the document with our point of view, but at the same time started to plan ahead. When the consultation document was published there were some changes which we had to make. Then when the legislation was finally introduced there were even more changes. As you can see it's a fairly fluid process, but one that any company in our industry has to learn to cope with if they want to continue to be successful.

So if we seem reluctant to comment it's not because we haven't got anything to say, it's just that we don't want to mislead you.

Hugo
@GabemUmbrella
06/11/2009

Apologies for the lack of recent posts, we've been preparing for the Christmas rush and ensuring things go smoothly takes precedence. It's all sorted now and Normal Service will resume this Friday, kicking off with a Legal Bits from Susan - covering the Agency Workers Directive, and a blog post from me discussing the broad topic of legislation changes. As for today, we have a few Public Service announcements about the lead up to Christmas.

As you will no doubt have seen on our front page we have a new offer for workers returning to Gabem or joining us for the first time. All they have to do is receive 4 payments through us before Christmas and they will receive a £50 voucher from either: Amazon, Tescos, Marks & Spencers, John Lewis, or Homebase. So tell your friends, there isn't much time left.

Keeping with the Christmas Theme, this year rather than send out cards as we have done each year we're going to be donating money to 4 charities. We have settled on "The Lighthouse Club" The construction industy charity as one of the charities, but would be interested to hear of any charities you think we should include. We can't make any promises that we will choose your charity, but they will all be considered, what have you got to lose? Just get in touch by emailing as usual.

Last thing on the Christmas front, a lot of you will be taking time off in December and it would probably be an excellent time to take the Holiday pay you have accrued through us. If you take it when you have no other payments going through you'll get the added advantage of less tax being taken from it. Remember we want all holiday paid out before April, because it doesn't carry over to the next financial year, you'll lose it. Just call in and our customer services department will take care of it.

Finally for those of you going to the National Online Recruitment Awards tomorrow, we'll see you there, as Trudy our MD will be handing out the award for "Best Employment Advice Website". We're very happy to be involved and want to wish all those nominated the best of luck.

Hugo
@GabemUmbrella
04/11/2009

Thinking of travelling to the World Cup next year in South Africa? If so read on!

I should probably start by introducing myself. My name is Justin and I have been working at Gabem for nearly 7 years now in the Invoicing dept. Basically my job is to raise your invoices and get you paid on time. I've supported Liverpool for as long as I can remember, and I am hoping that next year England do well in the World Cup (no penalty shoot-outs please).

Well I got to thinking since England qualified, that there will be many people considering going to South Africa to support their respective countries, and I thought as I was doing the research anyway I would put together as much useful information as I could and post it up here, to help you get over there and enjoy seeing your country do well.

Health

Before we get to the fun of buying tickets and sorting out accommodation I should probably cover any health concerns you may have about travelling to South Africa. You may have heard that there is a risk of catching Malaria in South Africa. This is true, but the main risk comes from the Northeast and low altitude areas of the Northern Province. All of the games are being played in areas that have been made safe from Malaria, plus it will be winter in South Africa when the World Cup is being played so the number of mosquitoes should be significantly less. Unless you are planning on spending time outside the game cities you shouldn't be at significant risk. All that said I am no Doctor so I would strongly suggest you go see your GP for medical advice on going to South Africa and follow what they say.

Malaria of course is not the only risk, there are other medical precautions you need to think about before visiting South Africa. While you are visiting your GP there are other vaccinations you should consider and discuss with them. The recommended vaccinations are: Tetanus (available as part of a three in one vaccine that includes diphtheria and polio), Hepatitis A and Typhoid. These vaccinations are free depending on what your GP's practice offers.

Here's what the NHS says about travelling to South Africa.

Traveldoctor also has some reasonable information on what vaccinations you might need

Tickets

Ok now on to the fun part and the reason I am writing this.....Tickets to the games! If you're lucky enough to be going to the World Cup, you need to start thinking now about getting tickets to any match or matches you want to see. It's extremely important you get your tickets from a reputable source here in the UK. Don't wait till you are out there hoping to get one, as there will be countless forgeries and it would be a disaster to waste all that money on getting to South Africa and not being able to see to a match. You can apply online for a ticket at the Official FIFA World cup site.

The Official FIFA World Cup site has an excellent FAQ with all sorts of questions and answers concerning tickets, match schedules, and info on the application process for tickets.

Passports and Visas

If you are a British Passport holder and don't intend to stay in South Africa for more than 90 days you don't need to apply for a Visa. If however you don't have a British passport then please check with your national Embassy for more info on what Visa requirements are in place, as they will vary depending on which passport you hold.

The Foreign and Commonwealth Office (FCO) has stated that your passport must be valid for at least 30 days after you intend to leave South Africa and they also advise that you have two blank pages in your passport on arrival. Again if you aren't a British passport holder then please speak to your Embassy to see what requirements apply to you.

With regards to accommodation you need to start thinking about booking where you are going to stay and any flights over there as soon as possible as places are filling up fast and prices are only going to go up. It's also worth considering how you'll be travelling around South Africa, specifically to and from games. The longer you leave booking somewhere the less choice you have and it may even mean you finding out that everything is booked up. You have hotels, B&B's and guest houses to think about staying in whilst out there.

A couple of places you could look for World Cup accommodation on the net are listed below, but bear in mind things are booking up very fast:

The FIFA page covering hotels for the world cup

Tripadvisor, a user review website of hotels and holiday locations, may give you access to smaller hotels than the FIFA site.

Travelling within South Africa

Travelling around South Africa might not be quite what you would expect here at home. There are taxis, buses and trains available, but the standard and volume of service available to the masses of fans expected to visit South Africa is all under scrutiny by the press at the moment.

While I don't want to be a scaremonger I feel I must say that at present reading articles about public transport in South Africa that there are concerns from everyone; politicians, fans and the organisers of the World Cup. Serious steps are being taken to make it safer to travel in South Africa, but for the time being there are problems. I will come to what precautions to take whilst travelling in South Africa in my next post and I'll go into more detail about the various means of transport available to you over there.

As part of your planning you will need to look at what group your country has been drawn in and when and where each match will be played, as a few of the games being played involve travelling from one side of the country to the other. If you are going to follow your country for a number of games, a good idea would be to book as many of the internal flights as you can prior to getting to South Africa. If you don't then make sure you budget for any extra flights you might need out there.

Insurance

It might seem like an obvious thing to mention but I can't stress the importance of making sure you have medical and travel insurance. I would go as far as saying that this may be a once in a life time opportunity and South Africa is such a long way from home, you don't want something outside your control to ruin it. When you choose your medical and travel insurance get the most comprehensive you can afford, but cross your fingers and hope you never have to use it.

You can check out most insurance comparison websites for the sort of travel and medical insurance you can get.

Alternatively you could visit Martin Lewis over at Moneysavingexpert who has some advice on finding cheaper insurance.

You may also consider using the site topcashback to help you choose who you get your insurance through, just be sure to read about how it works.

I hope you enjoyed reading this and found it useful, look out for more info appearing in the blog over the next few weeks. Please e-mail in if you think something needs to be added or even to leave your comments

Justin
23/10/2009

Image Sources:

• "UK Passport" original photo was taken by King Chung Huang's photostream and used under the Creative Commons Attribution 2.0 Generic License
• "South African train" was taken by Dewet and found on Wikimedia Commons it is used under the Creative Commons Attribution-Share Alike 2.5 Generic License

With news of MPs' repayments and resignations coming in over expenses, I find myself in a somewhat positive mood with HMRC. The only real flies in the ointment were Jacqui Smith's delightfully insincere apology, and the fact that those MPs that are standing down at the next election (they always remember to say that bit fast and quietly) are going to get a Resettlement allowance of between 50% and 100% of their salaries.

I think they should all consider themselves fairly lucky. It's only the expenses as far back as 2004 that are being scrutinised. If it was a self-assessment being investigated they would look at 7 years of records, and any underpayments would be expected to be paid back in short order.

The most laughable aspect of this whole thing is MPs complaining that the audit is "unfair", clearly misunderstanding what the word means. "Fair" would be claiming expenses in line with the rest of us, in accordance with HMRC rules, something I think we would all be very pleased to see.

For some reason I am reminded of a Heinlein quotation: "I don't trust a man who talks about ethics when he is picking my pocket. But if he is acting in his own self-interest and says so, I have usually been able to work out some way to do business with him."

Those of you who are regular readers will be aware of my slightly ranty post about the fuss surrounding the BBC advising people working with them to become contractors. Well, it has allowed another story to surface from the depths surrounding HMRC taking the accounting firm Vantis to court over their use of the Gift Aid scheme. Their system allowed their clients to avoid the 40% tax bracket and unlike normal Gift Aid left the charities with next to nothing.

Short of outright theft from a charity I don't think I can think of a way the story could be more morally reprehensible. It shares a theme with the MPs in that the complaints from Vantis are that they stayed within the rules, something HMRC are I think about to put to the test. Probably the best part of the story is that the deputy managing director and the managing director of Vantis both of whom have been summoned to court, are former Revenue officers.

There had to be one piece of bad news amid all this, and it's a minor point for most of us. HMRC are changing the time limit on reclaiming tax. The period is shortening from 6 years to 4 years, making March the last point you can claim back tax for the 04/05 and the 05/06 tax years. So don't put off claiming back incorrect tax this year, you'll be missing out.

In other self-assessment related news, I should warn you not to open any emails claiming to be from HMRC, and definitely don't open any attachment on those messages no matter what they say. This is just spam, it happens every year around the self assessment cut off, so just be very careful. If you're not sure about the message, just open your browser and Google "HMRC" and get the number for your local tax office from there. Don't click any links in the email, just delete it.

Hugo
16/10/2009

Just a quick reminder today folks along with a small but shameless plug, I aim to have a proper blog post for you tomorrow. HMRC's deadline for the paper self assessment submissions is looming ominously (October 31st), and if you would like us to do it for you (for the low price of £97.75 inc VAT), your self assessment has to be sent tomorrow, the 15th of October, any paper submissions arriving with us after that will be rejected.

Hugo
14/10/2009

The BBC contracting issue continues to grab headlines. It's a bit of a mystery why, these are hardly corrupt public servants abusing a broken system, they are essentially normal people contracting in a way that has been common practice for decades. Admittedly the way they went about it was less than orthodox, and for the BBC to set up a microsite explaining how to do it was perhaps not the best idea, but neither really warrants the coverage it's getting.

If the method they were using was actually a clear cut form of tax evasion like moving their money offshore then they would deserve everything they were getting, but for the time being we have no real idea whether they have done anything to legitimately earn the ire of HMRC. It's not even as if the amounts being mentioned are approaching those featured in the MPs expenses scandal (and we can be certain that they are probably all breathing a sigh of relief now that the scandal spotlight is on someone else).

I don't think we could be blamed for wondering if the reasons that we're hearing so much about it in the papers isn't down to the fact that many of them are owned by the same person that owns Sky, a direct competitor and vocal critic of the BBC.

I'm going to leave that line of argument now before it gets me ranting or in trouble.

What should be happening here is we should wait for HMRC to do their job and trust their judgement, it is very unlikely that without this artificial attention that there would have been a problem (I certainly find myself sympathising with whoever is doing the investigation) so we can make any judgements on facts rather than the briefest details.

Hugo
09/10/2009

Does it make you feel better to know it’s not just YOU! As the self-employed status of TV and Radio stars like Jeremy Paxman, Chris Moyles, Fearne Cotton and Fiona Bruce comes under HMRC scrutiny for what the Sunday Times calls ‘sophisticated schemes’ to protect their earnings, the contractor payroll industry braces itself for the results of yet another HMRC review of self-employment in the construction industry.

As you are probably well aware we operate both an umbrella company for temporary workers and payment arrangements for self-employed individuals. Most of our clients are in the construction field, and we have jumped through every hoop presented to us in the past 10 years to ensure that individual workers, their employment agencies, and we ourselves, comply fully with legislation. A BBC spokesman, when asked about using freelances, reportedly responded “these arrangements are legal, proper and commonplace within the industry”. Well said.

Lyn
05/10/2009

As you may be aware the minimum wage increased this week (yesterday in fact, October 1st) to £5.80 from the £5.73 it was previously. This means that any wages paid out after the 7th will be at the new higher rate. The impact to those of you using Gabem (or any true umbrella company for that matter) will be minimal unless you are using our CIS holiday scheme where you can now expect to save even more money over a year.

The minimum wage increases across the board were:

£5.80 per hour for everyone over the age of 21

£4.82 per hour for 18 - 21 year olds

£3.57 per hour for people under the age of 18 that have completed compulsory education.

The adoption of this tiered payment structure has been criticised quite heavily over the years, and I think you can understand why younger workers might well be irritated at being apparently short changed, but the tiers are there for a reason. The lower rate for younger people gives employers an incentive to take them on, and gets them in to work quickly, hopefully getting them experience (it also lowers the unemployment rate). For a person who may not have completed secondary education, this experience is essential as it can form the basis of a career and give those who start work at 16 something of an advantage sometimes over those who have gone on to university (heated debates often occur when discussing the pros and cons of these two elements of the workforce).

Another recent and significant change to the minimum wage legislation is that dealing with waiting staff. As of yesterday people employing waiting staff have to pay minimum wage regardless of tips. Prior to this change as long as an employer could show that someone waiting on tables had received the minimum wage from working in the restaurant one way or another, they had fulfilled their wage obligations (so long as it was a minimum wage contract).

The national minimum wage in this country is a good balancing act between the needs of businesses and workers. If you think the yearly increase seems small it's worth considering that the minimum wage set in 1997 in the US of $5.15 per hour remained unchanged for 10 years (during which the total inflation rate was around 30%) only reaching $7.25 per hour (around £4.53) just this year.

Hugo
02/10/2009