Are you at risk with any arrangements you are in or have put in place?
Make sure that either you or your advisers understand the new regulations and rules comprehensively!As this is an area where specialist knowledge, expertise and experience are essential, we would advise caution when deciding what arrangement you put in place or action you eventually take.
There are lots of accountants and advisors out there with little or no experience in this specialist topic, so be sure to fully satisfy yourself that they know the subject they are advising on.
Make sure the scheme / solution they are offering is backed by a guarantee and watertight insurance cover that's designed to look after you if something goes wrong, after all ask yourself the question; if it does go wrong who is going to pay!
You should be worried if:
- You pay workers directly gross
- Use a labour recruitment agency or Use labour recruitment agencies
- Have unlimited expense claims for workers
- Have labour and payroll combined into one for the customer
- If the arrangement involves sending and receiving monies offshore
- Use a rehash of contracts between workers and the construction company, with the workers still being paid directly by you
- The transparent pretence of setting up individual workers or small groups of workers as a limited company
- Pay construction workers cash 'off the books'
- Pay workers as 'casual labour' in cash through your company
Anybody offering the above solutions operate solely in the hope that they or their schemes are not going to get caught.
But the HMRC are being more aggressive and are adding more and more resources into flushing these schemes out. They have had great success already with recoveries increasing significantly year on year.
HMRC now scrutinise company accounts so any limited company is at risk of having its annual accounts checked for payments that are maybe for workers not declared under PAYE or CIS.
Consider this, HMRC have increased the amount they are recovering in tax, penalties and fines from construction companies that were running such schemes (or no schemes) but were considered to be operating false self-employment. Significantly because of this success they continue to recruit more and more tax inspectors so the amount of cases being prosecuted is increasing all the time. Will you be next?
Question: Are you able to explain all payments made through your company's bank account or out of it by cash?
Today there are 540 claims involving False Self-Employment breeches and a whopping 802 cases involving Managed Service Company legislation. And with the Managed Service Company legislation. HMRC are allowed the right to go after the directors of companies involved, yes Limited Company directors, who are deemed to have used arrangements to deny the Exchequer income tax and/or national insurance – scary stuff!
So it is reckless to ignore the threats to you and your business that are now a reality, as a result of the changes in the legislation and the determination of government through the HMRC to rout out ‘False Self-Employment’ and avoidance schemes.
When things inevitably go wrong for those suppliers, accountants or advisors sailing close to the wind, it is their clients who will be investigated by the relevant bodies and who will ultimately pay a heavy price. Keeping you safe, compliant and protected is our number one priority. We guarantee peace of mind and the freedom to get on with running your businesses. In addition, all clients are fully insured.