What may change come April 2016?

29th January, 2016

As we have gained more clarity we have come to understand that everything centre’s around “SDC” or Supervision, Direction or Control. HMRC confirmed to us that in their proposed changes, if you’re a contractor who works through a recruitment agency, you are automatically going to be considered under Supervision, Direction or Control “SDC”.

In turn this will mean that Travel and Subsistence Tax relief will no longer be allowable, the very thing that benefits over 400,000 contractors, and allows our temporary workforce to thrive.

Why make these changes I hear you ask? The answer is simple and actually somewhat genius from HMRC. “SDC” is actually being used to help reform IR35, their intention being that HMRC applies “SDC” to the IR35 test. Should this be the case then any contractor who is engaged by a Recruitment Consultancy, all being equal, would automatically be deemed to be “employed” – and in that one word you have the sole intention. 

As with everything it is always about Tax and putting more in the Treasury’s coffers!! At what cost though?

Will April 2016 be the Apocalypse so many seem to think or another Storm in a Tea Cup?

The simply reality is that as it currently stands no one knows and no one will know until the Autumn Statement 2015. My own personal belief after 15 years in the market is a resounding NO, indeed we are and have been, since the initial proposal announcement adopting “a business as usual” mentality.

We have seen many, many changes in our market since 2000, with the AWR being the most similar to our current circumstances, one which I remember well and again the same apocalyptic panic ensued that the Payroll Market and Contractors were doomed, the market as we knew it was over, yet it was business as usual.

Yes it would be remiss of me to say that this time around I am not more concerned then at others times in our Industries never quiet existence, but I also believe that we play an important role in the Temporary Workforce and are an essential cog in the mechanics of it all.

Most importantly having been with Government on Monday 19th October 2015, it was the 1st time I actually saw that this has the ears of the current Governments political powers, who’s primary concern is to win votes not lose them, not to mention the many industry bodies fighting this and the seemingly endless case law now being quoted.

I think it fair to say that if the said proposals do come in to effect than this will certainly change the landscapes of the Temporary Workforce, and will have a very negative impact on the market, and it is for this very reason, that I do not believe they will implement such drastic change to what is a hugely important aspect of our economy.

For Orca Pay Group it is business as usual, yes we have prepared and are prepared for the worst case scenario, but until that day comes, then the needless panic, gossip and rumour mill currently being circulated can quietly stay in the background and we will continue in the same way with all our contractors and clients.