The Umbrella Companies Blog Archive: September 2008
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Reading over some of the online news sites (in this case Contract Journal specifically), I've happened across an interesting little piece of info from the recent Labour Party Conference. The key points I'll be discussing are these statments from the policy document that was handed out at the conference itself:

I would imagine that most of you would be pretty surprised that not only do you need protection from self employment, but that it's having a damaging effect on you. From what we've seen throughout the industry contractors are choosing to become self employed rather than become employees of agencies or even umbrella companies.

I'm sure the party's stance has nothing to do with a perceived loss of tax revenue.

Ucatt appear to be very happy about the whole thing claiming that it's the "most significant step forward in the industry in a generation." I couldn't say whether or not that is the case, but one of the real strengths of the UK employment market and one that has been cited as a potential defense against any recession is the flexibility of our workforce; you, the contractors and freelancers.

The Labour Party website itself claims one of Labours "Key achievements" is that "There are approximately 430,000 more VAT registered businesses now than in 1997, and 350,000 more self-employed people". [Edit: I've just been handed the Construction News in which it estimates that 400,000 self employed workers are "bogus" I think it's safe to assume that there are more of those than in 1997 as well.]

This may not all be a bad thing, the current rules used to decide if a person is self employed or an employee are pretty murky, speaking to a former inland revenue negotiator a week or so ago he explained that it can all be a matter of perspective, the contracts can take you so far, but a lot of it can come down to the situation at the site itself.

That's our take on things, and we'd really be very interested to hear your views. You can send emails to Hugo, let us know what you think.

Hugo
26/09/2008

Today we have some new information on the Governments Consultation on "Tax relief for travel expenses: temporary workers and overarching contracts", as well as some Gabem specific news about the personal accident insurance.

On Monday Trudy, along with a number of other people representing businesses from across the industry (Umbrella Company providers and Agencies), attended a meeting to agree a consolidated response to the Governments Consultation on "Tax relief for travel expenses: temporary workers and overarching contracts" (if you would like to know more about it, Steve posted a very informative page to the site a couple of weeks ago that you can read here). All replies and comments with regard to the consultation have to be submitted by October 13th.

The meeting was very positive and there was strong consensus that Umbrella companies provide not only vital benefits to you - free agents (temporary workers, contractors and freelancers) - by reducing your administration and enabling you to claim legitimate work related expenses but also the government in ensuring contractors work within legally compliant umbrella company structures from which they receive the correct tax revenue. All agreed that without Umbrella Companies there would be a drop in tax revenue as many contractors and free agents are pushed underground. As soon as I see the official response I'll be sure to put as much of it on here as I am able to keep you apprised of the situation.

On Friday we will be sending out information about an increase in the cost of our personal accident insurance cover. The new prices are £2.50 (which was previously £2.00) per week for the normal personal accident and an additional £1.25 (previously £1.00) per week for the 24 hour personal accident insurance (so if you were to opt for both the total cost would be £3.75 per week). This is the first increase we've had to pass on in 5 years. Unfortunately, as you are no doubt aware, the cost of financial products has increased significantly in the last 12 months but we are delighted that this is still a great deal for you as most private accident policies charge upwards of £5.75 per week.

As has always been the case if you already have your own Personal accident policy with cover equivalent to the one we provide, you can opt out by supplying us with your policy number, certificate and details in writing.

Hugo
25/09/2008

A lot to cover today and I'm going to start with a piece of good news, which applies to everyone not just umbrella company workers and contractors.

Those of you previously on a 543L tax code may have noticed that it changed last week to 603L. This was introduced to adjust (rectify!?) the government's tax changes back in April. It is the new stardard tax code and for those of you on other L tax codes should see an increase of 60 to the number before the L. These changes will be in place for the rest of the financial year, so until April 2009. It may make only a modest difference, but more money in your pocket so no bad thing (especially given the week we have had).

Any of you that read Susan's Legal Bits will notice Susan's distinctive style in the next section:

We've been getting a few calls this week about the opt-out form for the Conduct of Employment Agencies and Employment Businesses Regulations 2003 that we sent out along with the TUPE letters. The opt-out gives you the chance to express that you do not wish for this piece of legislation to govern your relationship with the agencies you work through, but it has no bearing on your relationship with your umbrella company it's just that, as a limited company worker, you have the right to choose whether the legislation will apply to the agencies you find work through or not.

You can change your mind any time you are between contracts by simply sending us a signed note stating your new choice.

The decision is all yours and, although it's important to make a decision, whatever you choose is simple to change so it won't be the end of the world. For more advice please don't hesitate to give us a call and Susan our HR Manager is always happy to answer any questions you may have.

I've been asked recently to talk about the self billing, as it's becoming more of a feature of the relationships between umbrella companies, agencies, and contractors. Some of you may already be aware of the concept of self billing because companies or agencies that you've worked with previously under our umbrella company contract have had a self billing arrangement with us. Self billing is just a method of speeding up paperwork between businesses, it essentially allows the company that will be paying for a service to raise an invoice for the value of that service without having to wait for an invoice to be sent to them.

You can't just become self billing, there are a set of criteria you must meet before you can and even then you have to have an agreement with each business with which you have a self billing agreement. It's not a blanket arrangement. For umbrella companies like ourselves dealing with so many companies and agencies on a weekly basis, it can be extremely helpful and it makes things quicker and easier for you as well.

That's it for now, have a great weekend, fingers crossed the sun sticks around for the whole of it. As always if you want to get in touch, you can just by clicking on either Hugo below, or Susan up in the text.

Hugo
19/09/2008

I thought I'd take a break from talking excitedly about our new products, and cover something more technical instead.

Today's post is about the new recently introduced immigration rules. It's a topic relevant to everyone because all employers need to review their employment processes and for the majority of those affected it will mean an increase in administration.

Our Solicitors, recently briefed Susan and our compliance team on the new rules. Anyone currently allowed to work in the UK (EU nationals, current work permit holders, and people already registered to work with the Workers Registration Scheme) are unaffected. However, people coming into the country who would normally require a work permit from their embassy will be faced with a points/tier system based on a number of criteria including individual wealth, skills and employer sponsorship.

Additionally, companies wanting to bring people into the UK from outside the EU to work will require a license to do so (you may have seen the tv advert with the person jumping over hurdles). We have been advised that our current checks are compliant with the new rules and we don't need a license so there will be no impact on you and the way you work with us.

If you want to get in touch you can on the email link below, enjoy the rest of your day and speak to you again tomorrow.

Hugo
18/09/2008

Sorry to leave you on a bit of a cliffhanger last week, I had intended to have an update for you sooner, but I was struck down by something over the weekend, time to get things back on track.

So what do Gabem's new payment contracts mean to you? Well if you are happily in one of our umbrella companies, nothing at all. You will continue to enjoy the benefits of your Gabem Umbrella Company. For those of you considering signing up for one of our self employed payment contracts (Gabem CIS for self employed workers in the construction industry, and Gabem Solo for self employed workers outside the construction industry), there are a few things you need to consider.

Both payment contracts require you to find your UTR (unique tax reference) number, you should already have one if you've ever completed a self assessment online, otherwise it may appear on tax documents you've received.

If you will be using the Gabem CIS payment contract you will also have to be registered with the New Construction Industry Scheme (which changed from the original Construction Industry Scheme in April 2007), if you previously had a CIS 4 card and were paid through it within the last 2 years we've been told that the registration will have been carried over (but I would check anyway just in case). We will need to verify your CIS registration with HMRC before we can take you on. As a quick aside, if you have an old CIS 4 card and don't know your UTR, it will be the first 10 digits of your old CIS number.

However, the most important consideration is that of your employment status. To take advantage of our CIS and Solo payment contracts you need to be self-employed or "in business in your own right" as the HMRC likes to say. There are four areas that are considered the key factors in determining your status: the right to control your own work - you determine how you carry out your work, mutuality of obligation - essentially the ability to refuse work, substitution - can you send a substitute to complete your work, and financial risk - do you pay for your own tools for example and can you make a profit or loss. Sounds complicated but we will be providing you with more information over the next few weeks and you will soon be able to request our new brochure, which will have all the information you need.

Well I am off to recover a little more, I hope you all have a great weekend, and that none of you catch this in the meantime.

Hugo
12/09/2008

Well, if you believe the weather forecast, that's summer over and done with for 2008. Any of you spending your weekend at the Bestival, best of luck, the fancy dress theme of  "30,000 Freaks Under the Sea" couldn't be more appropriate!

We've got some big news this week, which most of you are probably aware of by now. On October 13th we will be launching two new payment contracts for self employed people. This is the big change I spoke about back in June and July, and what we've been working towards ever since. As with all our payment methods we have taken a great deal of care and have consulted with our advisors to make sure that each of the contracts not only represent the best value for you but are also compliant. Everyone at Gabem has been working hard to bring these contracts to you and we are all looking forward to being able to offer different options for our existing customers and people who don't want to be paid through an Umbrella Company payroll.

The two payment methods will be called Gabem CIS (for self employed people working in the construction industry) and Gabem Solo (for all other self employed people). They've been created to allow people who are in business in their own right to work compliantly with agencies, remain in control of the way they work and have most of the tedious and time consuming administration that comes with being self employed, taken care of by Gabem.

Alongside the introduction of these contracts you're going to see changes to the website (what I've been working on), the brochures and forms we send out. You'll see navigation improve on the website, with more static menus than you had previously, and more colour all round, tastefully done of course.

We look forward to hearing what you have to say.

I hope you all have a great weekend.

Hugo
05/09/2008

Hi and welcome to the mid-week blog post. No looking back or ranting today, just a quick update and some housekeeping.

Susan's Legal Bits has been updated. This month she is being quite topical and has been looking at the "Transfer of Undertakings (Protection of Employment) regulations 2006", or as we like to call it Tupe [SteveG: Tupe or not Tupe that is the question]. If you're working through a Gabem Umbrella Company, you should have received a letter about this if you haven't or if you would like to know more feel free to get in touch.

In her post Susan refers to the legislation as both beautiful and fascinating.....Susan's previous legal bits including the article on Childcare Vouchers and the Agency Workers Directive are all available to read if you go to her section.

In other website news we will have further information on dispensations soon, and by the next blog you should be able to email us at the blog directly rather than go through the contact page, we will be making it easier to contact us by having a direct email address.

The blog has been archived, and as usual I have left the last two posts for people to look back at so it's not completely bare.

If you haven't read Steve's page on the Government Consultation on expenses it's really worth a look, especially if you haven't read anything about it before.

Lastly and on an entirely unrelated, and particularly geeky note, if you haven't checked out Google's New Internet Browser, "Chrome" it's not bad. I wouldn't switch over yet, but I'll bear it in mind if I ever tire of Firefox.

Hope you're all having a great week.

Hugo
03/09/2008