The Ever Changing Payroll Industry – Future Proofing your Business
A few weeks ago I walked in to a meeting with a potential new client. This client was and is a well-established recruitment agency with a turnover of more than £120 million per annum and multiple brands within different industries. Our meeting lasted an hour, and of this hour we spent 10 minutes actually talking about payroll, what payroll solutions we offered, and how many contractors we currently payroll. The other 50 minutes was spent discussing IR35, The Right to Work in the UK and Modern-Day Slavery, areas (not including IR35 in this), that will soon be having a substantial impact within the contractor marketplace (we are already seeing this movement). At the end of the meeting I was met with the following “How f@cking dare you come in to my business, that I’ve built over the last 50 years, and sit there and tell me I’m doing things wrong”. Keep that quote with you until the end of the article.
Its fair to say that this got me thinking. I’ve been doing this for 15 years and I’ve never had anyone react to me in this way (well at least not to my face). It was time to reflect, sit there and dissect the meeting and what we discussed, and then it dawned on me.
During our meeting we spent 10 minutes actually talking about payroll. It consisted of simply how much do you charge? Are your payroll solutions compliant? Do you pay referral fees and a commercial rebate?
In that moment I came to realise how vastly different I see what a Payroll/Umbrella Company should be providing clients and contractors. The age old message of price and how much will we give you for your business is still what dominates so many meetings. Did the person I was sat across the table with actually understand just how much more we are required to do and actually the strategic resource that I wanted to show Orca Pay Group to be. Quite simply no. Why do I say that? We spent 50 minutes talking about the following: – IR35, The Right to Work in the UK and Modern Day Slavery. It was as a result of these topics that I received the goodbye message I did. So why are these so important to the contractor marketplace?
The buzz word of the last 20 years! Does anyone truly know what IR35 is anymore? I’m not going to spend much time on this as this is an article in its own right, and such is the current mess HMRC finds itself in, yet still absolutely going to go ahead with off payroll in the private sector, that I could write a novel on this. One question however that I am constantly asked regarding IR35 is do I think anythings going to change? As it currently stands, no. I see people campaigning for change on a daily basis and actually I am happy to admit that Orca Pay Group does not really get involved in this, as much as 9 times out of 10 we agree that IR35 is wrong as demonstrated in a catalogue of lost cases for HMRC. Sometimes the reality of leadership is to accept that no matter how much banging of the drum we do (as we did we campaigning for expenses, for off payroll in the private sector), we have to accept the reality of whats to come, and this is the message both I and Orca tell our clients currently.
The Right to Work in the UK
I have written articles on this before, yet it still seems that companies don’t truly understand that this legislation has been in play since 2015 – and now with an amendment to the Immigration Act 2016 it no longer carries Civil Penalties, this carries Criminal Penalties. It carries a £20,000 fine per person that does not have The Right to Work in the UK or can lead up to 5 years imprisonment. Operation Magnify is full swing and they handed out £4.7 million fines last quarter alone. Indeed we have recently carried out a Right to Work in the UK check for a new client who had 800 contractors and 55 of them came back not having The Right to Work in the UK. This could of been a £1.1million fine to them had we not uncovered this. It is the responsibility of both the EMPLOYER and PAYROLL/UMBRELLA COMPANY to carry out The Right to Work in the UK checks on every employee that we send out to work. This means meeting and seeing the individual, seeing the original document, be this Passport, EU ID card or any other approved Document and verify this with the Home Office. Orca Pay Group has led the way in plugging in to the Home Office to ensure we can work with our clients to provide 100% accuracy with EVERY EMPLOYEE to ensure their Right to Work in the UK status. In turn protecting company reputation and huge fines, whilst also be audited ourselves by The Home Office.
Modern Day Slavery
To use a quote from Andrew Wallis the CEO of Award Winning Charity Unseen who specialise in fighting to rid the world of Modern Day Slavery, this is “a slow moving Tsunami”, which is absolutely rife within specific sectors of the contracting market in the UK. Appreciate that this is quite a statement to make, but the simple reality of this is that I’ve seen it first hand with contractors that wanted to be payrolled through Orca Pay Group. We can all turn a blind eye to this, and indeed I know I have lost business due to what Orca Pay Group has implemented to tackle Modern Day Slavery. I see many companies and competitors who have all published a Modern Day Slavery statement, but what are these companies actually doing to implement and tackle this? Orca Pay Group is the only Payroll/Umbrella Company currently in partnership with Unseen and further more we are the only Payroll/Umbrella Company that is part of the TISC (Transparency in Supply Chain) Report. Again giving our clients and contractors complete transparency in everything we do. Something we will be required to publish on an annual basis and also be audited on.
Payroll Umbrella Company
We still very much live in a referral based market (something I will own that I very much used to be part of and happy to pay), but is that £250 referral fee worth more then your contractor work force or company/brand reputation (I appreciate that not every business takes referrals), as business leaders its time to open our eyes. Orca Pay Group is proud to be a pioneer in the above and to be a stand-alone Payroll/Umbrella Company that is trying to protect our clients and contractors. When I say the above is coming believe me, I know. Its already here and I am happy to say that we’re ready, prepared and looking to work with like minded leaders who are looking at the future, lets be proactive as oppose to reactive. Its fair to say that the payroll part is now the easy part and as such its why it took 10 minutes to talk about. But in response to the quote I asked you to keep with you, yes companies are doing things incorrectly, but we’re here to help you get it right, so that your business can flourish and grow for the next 5, 10, 20 and 50 years, we’re so much more than just payroll!