National Insurance Contributions Bill to negatively impact recruiters?

Recruitment and Employment Confederation (REC) chief executive, Kevin Green, has warned that the National Insurance Contributions Bill could have unintended consequences which negatively impact recruitment agencies.

Speaking to Recruiter magazine shortly after giving evidence to the House of Commons Public Bill Committee, Green also said that rather than tackling false self-employment, the Bill could in fact could make it worse.

Scope of the Bill

First debated in detail by MPs in early September, the National Insurance Contributions Bill aims to:

• Simplify the way National Insurance (NI) contributions are collected from the self-employed

• Accelerate the payment of NI contributions in dispute in avoidance cases, and provide for follower notices where a scheme has been shown to fail in another party’s litigation

• Apply new information and penalties to scheme promoters

• Introduce a targeted anti-avoidance rule “to prevent people from circumventing new legislation tackling avoidance involving employment intermediaries”.

Following a second reading in the Commons, MPs set the committee stage for 21st October and invited expert evidence and views.

Assessing the potential impact of the Bill, Green argued that the current draft places an overemphasis on the role of intermediaries in the supply chain, such as recruitment agencies. He stated that the “legislation only tackles the payroll company and makes it totally accountable, while it ignores the company [end employer] and worker.”

Green went on to suggest that all parties in the supply chain should share responsibility to ensure full accountability and compliance. He also stated that the Bill’s implementation date, which currently stands to be backdated to April this year, should be delayed to provide more time for recruitment agencies to put relevant compliance processes in place.

The Bill will be scrutinised by the Public Bill Committee on 21st, 23rd and 28th of October. It is then expected to report its findings before the end of the month.

Getting it right

At Outsauce, we recognise the benefits of simplifying NICs for self-employed individuals and are fully supportive of rules to clamp down on avoidance schemes, which currently cost the economy billions in lost revenue a year. However, we agree with the REC that any new legislation must share the responsibility for compliance fairly across all intermediaries in the supply chain.

Recruitment agencies already face a great deal of responsibility for ensuring the non-permanent employees on their books adhere to all relevant compliance requirements. For recruitment agencies looking to minimise this time-consuming burden, Outsauce provides a broad range of contracting support services which they can rely on to meet the latest legislative requirements and free them up to get on with growing their business.

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