The draft legislation has now been released by BIS with responses invited up to 11th December 2009.
The draft highlights many potential pitfalls for the unprepared agency. It specifically highlights the issue of hirers placing indemnity clauses on the agencies to protect them from any of the liabilities; there is no intention to legislate to prevent this and this could leave many agencies in a vulnerable position.
Whilst implementation has been delayed until 1st October 2011, in recognition of the amount of work required by businesses to prepare for the legislation, it is still the Government’s intention to have the legislation on the Statute Book in this Parliament. This allows Gordon Brown to partly meet his commitment made recently at the Labour Party conference.
The basic principle is to provide temporary workers the same rights as permanent workers in a broad range of areas, after a qualifying period.
The legislation will apply to people finding temporary work through a “temporary work agency”.
All employees will benefit from equal treatment; these benefits will include payment for overtime, shift allowances, unsociable hour’s premiums/bonuses, payments for difficult or dangerous duties and holiday pay.
Agencies will be responsible for making sure that equal treatment is established, unless they can establish a defense demonstrating that they have taken reasonable steps to obtain the necessary information from the hirer and acted reasonably in determining the workers basic working and employment conditions.
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( 2.9 / 211 )Article provided by Professional Passport.
The length of contract issue has only come about as end clients fear becoming liable for employment rights where contractors are engaged for periods exceeding 12 months.
The fear of contractors seeking employment rights with end clients has existed for sometime and many end clients insert liability clauses in the contracts with agencies making the agency liable for any compensation, or without prejudice payments, made to contractors.
There are now clear case precedents where rulings on IR35 have specifically addressed the issue of length of contract. In summary, the length of contract is not seen as a determining factor for indicating employment rights where the contract and the working arrangements clearly show that a business-to-business relationship exists.
There is also evidence that shows where this practice exists it can weaken the arguments. By operating such a practice could suggest a concern that employment rights do actually exist and an organisation is actively trying to avoid them.
This provides another example where the practice of confirming the actual working relationship for a particular assignment benefits end clients, agencies and contractors.
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( 3 / 220 )The adult rate of the National Minimum Wage (NMW) increases to £5.80 (£5.73) an hour from 1 October 2009. This is payable to those age 22 and over.
The hourly development rate increases to £4.83 (£4.77) and for 16 and 17 year olds to £3.57 (£3.53) an hour.
HMRC are able to charge penalties to those employers found to be in breach of the NMW rules.
If you have any queries on the NMW please do get in touch.
Internet links: NMW rates and HMRC guidance on penalties
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( 3 / 154 )HMRC have written to half a million companies and their tax agents, to advise them of important changes to Corporation Tax (CT) return filing. The mail-shot contained a new HMRC leaflet on the changes, which will require all company tax returns delivered after 31 March 2011 to be filed online, for accounting periods ending after 31 March 2010. The leaflet explains how, after 31 March 2011, CT returns must be filed online in a specified data format (known as Inline XBRL or iXBRL).
Companies House has also announced that it will accept company accounts in XBRL, the same format as the CT returns. Companies House will introduce their XBRL service for unaudited full accounts by the summer of 2010, and then continue to develop their XBRL capability for all the main types of accounts they receive.
HMRC’s new XBRL service will be available from November 2009.
Internet link: HMRC and Companies House statement
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( 3 / 149 )HMRC are advising businesses that new rules on how VAT returns are submitted and payments are made will come into force next year. Paper VAT returns will be phased out from 1 April 2010.
As a start of this phasing out process, businesses with:
• VAT (exclusive) annual turnover of £100,000 or more, and
• all newly registered VAT businesses
will need to submit their VAT returns online and make payments electronically from April 2010. Those businesses that are already VAT registered, with a turnover below the threshold, will have the choice to use paper returns but this will be reviewed by 2012.
Please do get in touch if you would like any further advice in this area.
Internet link: HMRC VAT
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