Following extensive engagement with its membership regarding the issue of false self-employment via intermediaries, APSCo has filed its response to the Government. Whilst the trade body does not believe false self-employment to be prevalent within the professional staffing sector, it does fully support legislation which seeks to stop this practice as long as such initiatives do not have unintended consequences which could damage the professional recruitment industry.
In its response to the draft legislation, APSCo has raised several key concerns which, it believes, will result in unintended consequences, unquantifiable risk, and administrative burden for its members unless significant changes are made. APSCo’s main area of concern is that the recruitment industry is being asked to drive compliance with no assurance that their behaviour will give them a legal defence in the face of unscrupulous behaviour by other intermediaries, over which they have no control.
In its response, APSCo has strongly urged HMRC to consider including the following within the final legislation:
- statutory guidance on the compliance actions a recruitment firm should take.
- a statutory defence in the event that they undertake such appropriate compliance checks.
- a definition of personal service company (“PSC”).
In terms of EU law there is a requirement for proportionality in taxation, which covers UK law as well, and APSCo believes that the Government’s proposal as it currently stands may be open to legal challenge on these grounds.
Regarding the PSC definition, APSCo appreciates that this has been attempted previously, but failed because an all-encompassing definition covering every eventuality could not be found. However, APSCo’s members agree that a definition which covers even 60% of situations would be helpful, as it would allow them to at least be sure of that 60%, and would only leave uncertainty hanging over the remaining 40%, rather than over all PSCs.
Commenting on its response to the Government, APSCo’s Head of External Affairs, Samantha Hurley comments:
“APSCo is very concerned that the proposed legislation has been drafted very widely and that the staffing industry is being asked to take on an unreasonable level of risk without any way of mitigating this. We will continue to engage with HMRC regarding our concerns and update our members accordingly. We would also like to thank all those who provided us with feedback on this issue –all of which have been taken into account within our response to the Government”.
