With the RTI pilot already underway, and all employers and agencies required to have implemented the system by October 2013, it’s a good idea to become familiar with what will be required from you, the recruitment consultancy, and what you can do to make your life easier before, during and after the transition.

What is RTI?

RTI (Real Time Information) is being introduced by HMRC as a way to improve the PAYE system for employers, employees and HMRC, and will support the introduction of Universal Credits.

Instead of the previous haphazard way information has been received by HMRC regarding pay and taxable deductions, HMRC will now be receiving information as payments are made and will therefore be better equipped to ensure the correct deductions are made from pay. This will also mean that many more employees will pay the correct amount of tax and National Insurance in the tax year.

What are the benefits?

For HMRC, there seem to be many benefits, which will in turn result in benefits for companies, individuals, Umbrella Companies and recruitment companies – all related to a more streamlined process and the possibility of individuals and companies paying the correct tax more of the time. HMRC suggests that RTI will:

• Remove the need for the end of year return (P35 / P14)
• Make PAYE more accurate for individuals
• Simplify the employee starting and leaving processes
• Reduce the number of bills and repayments sent after the end of the tax year
• Allow HMRC to pursue late payments more effectively
• Support the payment of Universal Credits
• Reduce Tax Credits error and fraud
• Reduce the number of individual customer records needing an end of year recalculation

What does it mean for recruitment consultancies?

RTI reporting will need to become an integral part of an employer’s normal payroll activity. When running the payroll, the software will gather all the required information send it to HMRC via internet, either through the Government Gateway or by using Electronic Data Interchange (EDI) on or before the date the payment is made.

While the new system might help to streamline the processes at HMRC, it could prove time-consuming and disruptive to small and large businesses alike.

There will also be initial costs to cover the transition software and training.

Umbrella a solution

For agencies wanting to avoid the additional costs, administrative work and issues likely to arise from the cross-over, using an Umbrella Company could prove to be the best solution. Not only would the Umbrella Company carry the transitional costs of switching to the RTI system, they would also take on the additional work required to implement it, and the onus would be on them to stay up-to-date with any RTI changes and news.

The agency would only need to send through the relevant timesheets and funds once a week – the rest would be taken care of by the Umbrella Company.

Choosing an Umbrella Company

Here are a few tips for choosing the right Umbrella Company to take care of your payroll responsibilities:

Experience and Reputation

Only consider an Umbrella Company that has been in operation for a number of years and look for one that has existing relationships and a good reputation with other agencies. Be wary of any new companies as you run the risk of losing money (and your own reputation) to a fly-by-night operator.

Easy online system

Make sure that your Umbrella service provider has a simple online system that’s easy to manage. There’s no point in using an umbrella provider to avoid admin, only to have to spend hours figuring out their complicated systems.

Personal service

As important as an online system is, when you need to speak to a real, live person, one should be available to you immediately!

Fee structure

It is extremely important that you establish upfront what the fees are – Ask the Umbrella Company to provide you with a full schedule of fees to ensure that your candidates aren’t going to be overcharged.

Insurance

Always ask about the insurance policy to be 100% sure that you will receive your money, no matter what. Your Umbrella Company should have public liability, employers’ liability, and professional indemnity insurance cover.

Expense policy

Some companies may claim an extensive claims policy, but the conditions attached are so extreme that the likelihood of your clients actually claiming is pretty slim. Do your research and ask as many questions as possible. Avoid any company that states that there is no need to prove your expense claims – if HMRC does query expenses and you cannot provide the necessary receipts, the tax liability could fall on your candidates.

Employee benefits

Will they give your clients the option of employee benefits such as sick leave and maternity leave? Well established companies like 1st Contact Umbrella can offer fantastic employee benefits.

Payment dates

Does the scheme have fixed payment dates you (and your clients) can rely on? Be sure to find out what the payment methods and schedules are and make sure the answers are not vague. You want to know exactly what their payment policy is, so that you have recourse should the timelines not be met.

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1st Contact Umbrella has successfully assisted over 100,000 clients with our no-hassle, efficient payroll service. We have an excellent reputation and long-standing relationships with many top UK agencies and you can expect:

• invoices and timesheets to be dealt with in a timely manner’
• your clients to be paid on-time with no fuss or hassle to them or you;
• great discounts for you and your candidates;
• PAYE, NI payments and returns dealt with each and every month;
• P45’s and P60’s lodged with HMRC with no effort from your candidates;
• any payments or tax queries dealt with by us, not you;
• Rapid responses to your queries

If you have any questions related to Umbrella Companies and RTI, visit www.1stcontact-umbrella.com or speak to an experienced and professional consultant by calling 0808 141 2341.

On the 1st of October this year, the Government’s new Pension Auto Enrolment law will start to take effect, with the first group of employers automatically enrolling their qualifying employees into a work pension scheme. Continue Reading

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At least 1200 guaranteed jobs on offer!

This Saturday and Sunday (26/27 November) sees the Australia Employment Expo hosted in Dublin’s Aviva Stadium. The event seeks to introduce Australian employers from a variety of sectors to qualified and experienced Irish people looking to relocate.

More than 30 employer and recruiter stands are expected at this event, many of them from the following industries:

• Health & Wellbeing (including medical & dental care)
• Building & Construction (including Engineering & Architecture)
• ICT (Information & Communications Technology)
• Mining, Oil & Gas

Interested parties will have the opportunity to find out more about Australia as a country, as well as about the employment opportunities on offer, which sectors are hiring, how to apply for a visa and much more. Potential employees will also have the opportunity to meet with several employers who have immediate vacancies to fill and who will be recruiting on the spot. More than 1200 jobs have been confirmed for the event, among them 400 through huge engineering company Hatch. Representatives of Western Australia are also said to have more than 3 000 skilled migration visas available especially for the event.

Keith Seed, International Trade Services Manager at the Chamber of Commerce and Industry in Western Australia has said that up to 10 000 skilled workers are needed in Australia in the immediate future, particularly in Queensland and Western Australia.

If you’re interested in attending the event and applying for any of the jobs, you must have registered at www.ausemploymentexpo.com and paid €10 prior to the event.

For advice or information on Visas to Australia, New Zealand, South Africa or the UK, visit www.1stcontactvisas.com.

If you’re a contractor working in the UK, you might be wondering how you can up the ante by increasing your turnover and landing the most lucrative contract positions out there. Here’s our simple but effective guide to finding Top Contracts in 2012.

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HMRC has announced that those who submit their 2010/2011 tax return late will face higher penalties than in previous years.

According to HMRC, the previous £100 penalty was not enough of a deterrent and new measures have been put in place to ensure timeous returns. A spokesperson said: “HMRC spends a lot of time pursuing late returns and getting involved in unnecessary appeals work. We want to focus our resources on more productive work such as catching criminals and collecting tax.” Continue Reading

Chairman of the National Outsourcing Association Martyn Hart said recently that more firms and sole traders operating in the modern business environment are choosing to outsource their payroll functions to companies who specialise in these services. Continue Reading

A targeted unpaid tax crackdown by HMRC has seen five plumbers arrested during raids in London, Hampshire, Surrey, Middlesex and West Bromwich. Continue Reading

IR35 legislation is once again in the spotlight after another tribunal hearing has ruled against HMRC in favour of the independent contractor, finding him to be “legitimate”. Continue Reading

“Independent Contractors in the UK should start looking to small and medium businesses for new contract opportunities,” says Pieter Carstens of 1st Contact Accounting.

“In contrast to large businesses, which have cut back on hiring fulltime or contract staff, SMEs are predicting job creation within their businesses, particularly for IT and engineering contractors.” Continue Reading

Are you the owner of a limited company or an independent contractor in the UK?

Using a professional accountant and accounting system for your business can hugely reduce your admin and stress, save you money and ensure you avoid any legal hassles. But how do you know if you’ve chosen the right accounting firm to deal with your particular needs? Continue Reading

The LVCR (Low Value Consignment Relief) tax avoidance loophole will finally be closed this year, putting an end to the multi-million pound Channel Islands industry and an unfathomably long run of exploitation by large online mail order companies, including Play.com, Amazon and HMV. Continue Reading

At those times when money is tight, it’s increasingly important to maximise your earnings.  With the announcement of large public sector cuts and the continued global slow-down of commerce and industry in general, it’s easy to paint a grim picture.  However, many savvy individuals are turning this to their advantage and reaping the benefits of contracting. Continue Reading

The AWR (Agency Workers Regulations) come into force on the 1^st of October this year – just a few months away and 1st Contact Umbrella is busy behind the scenes to ensure their clients benefit from the new regulations.

The principle of the AWR is to entitle temporary agency workers “equal treatment” with regards to basic employment and working conditions, if and when a 12-week qualifying period in a particular job is completed.
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If you’re an independent contractor or considering the switch to freelancing, an Umbrella Company might be the most sensible solution for you. Here’s a quick rundown of the benefits of working through a professional Umbrella Payroll Company.

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Tax Penalties are enforced by HMRC for various reasons and are more often than not the direct result of either procrastination or a lack of information.  Ensure you don’t cut into your annual take-home pay by having to fork our hundreds of Pounds for penalties which could have been avoided in the first place. Continue Reading

1^st Contact Umbrella often receives calls from people considering becoming contractors or who are in the process of weighing up the differences between starting a Limited Company and joining an Umbrella Company.

Here is a list of the most frequently asked questions about Umbrella Companies – answered by 1^st Contact Umbrella consultants. Continue Reading

The 2011 budget speech as expected held very few surprises, but did contain a few welcome changes, some of them of particular interest to independent contractors and those considering starting up a small business this year.

“Contracting through a Limited Company has steadily grown in popularity over the years and has become an even more attractive prospect for the 2011/2012 tax year, especially in light of the recent budget speech.” says Liam Collins of 1st Contact Accounting.

A few of the changes include the higher than expected reduction in corporation tax, as well as the additional relief for those investing in start-ups, under the Enterprise Allowance Scheme. The income tax threshold for investment will increase from 20% to 30% from the 6th of April – a measure which will further decrease the risk for investors.

Other measures include the decreasing corporation tax rates for small companies from 21% to 20%; a higher tax free allowance (increased by £1,000); and an increase in the mileage allowance from 40p to 45p.

Prime Minister David Cameron has been actively encouraging entrepreneurs to lead the way in the economic recovery by making changes that will allow the UK to become one of the easiest and cheapest places to run a company. Cameron recently said:

“We need to see a country where new businesses are starting up on every street, in every town; where entrepreneurs are everywhere.”

Plans are underway to expand the scope of the New Enterprise Allowance, which aims to create up to 40 000 new businesses by 2013.

For advice and information about setting up a Limited Company, visit www.1stcontact-accounting.com or call 0808 141 1624 and speak to a qualified and friendly consultant about your own business aspirations!