RACS Group Blog

December 2010 - Newsletter - click to enlarge

2010-12-13T10:55:00.002Z

This issue covers Employment Status, the latest court appeal, AWR Seminars,Tax on EBT's and RACS's discussions with OTS

October 2010 - Newsletter - click to enlarge

2010-10-27T14:49:00.003+01:00

This issue covers, the Agency Worker Regulations and the impact on providers, Seminars on this very topic. Bribery Act 2010 - cash incentives and more....

HMRC Inspects Umbrella Providers

2010-09-21T14:26:00.001+01:00

RACS Group has recently collated some useful information regarding current HMRC visits to Umbrella providers and some key points involved in their inspection process. It would be worth passing these on to your providers, asking them to demonstrate and evidence their processes. Failure to apply these rules correctly has seen an increase in payment demands via the Umbrella and/or Contractor for breaching the rules and over claiming tax benefits. Agencies are as yet unaffected by debt transfer for Umbrellas, however when issues are concerning ‘expenses abuse’ by an Umbrella provider and where the provider has been recommended directly by an Agency – this can lead to a ‘rail-roading’ situation and in certain circumstances debt responsibilities can be passed on.

Please ensure that each contractor receives ‘Individual Tailored Advice’ before they make an informed choice of which provider to use.

Points under the spotlight

1. Travel and Subsistence:

a. Correct Mileage rates being applied – exceeding the annual limits, providers are tested on their ability to calculate and apply correctly – threshold specific.

b. Classification of a Temporary Workplace – how do your providers clarify this? If it is not applied correctly then all mileage claims will be deemed null and void and thus repayment of benefits, plus interest and penalties have been requested.

c. What information is held about the contractors car? – Make, Model, Engine Size, Fuel type and Insurance requirements – how is this logged and what is the ‘proof for business’ use.

d. Overarching Employment Contract – are the ‘several required points’ evident in the contract to make it overarching and are they regularly tested? What processes does the Umbrella have in place? Distance travelled, Contract length and assignment variation(s), Audit processes, times of the day and the significance of each in relation eligible claims. Can these be demonstrated?

e. Expenses policies and procedures for all of the above, detailed records held and regular audit reviews.

2. Employment:

a. Overarching Contract – is it actually issued, does it state the full employment rights, do you have a current copy?

b. Employment requirements such as policies and procedures, right to work, validation of ID and proof of address. Are these all recorded and filed. Failure to do so breaches Border Agency requirements and immigration law this can lead to fines or imprisonment.

c. Holiday Pay, Sick Pay, SMP and other statutory payments – can these be demonstrated that correct payments have always made and any policies and procedures to the same.

d. Genuine employment – does the Umbrella clearly employ the contractor – many tests to show this and very different to agency conduct regulations. Or is it just disguised employment.

3. Expenses:

a. Issued Dispensation – does your provider(s) have one? Is it current, has it been revoked? The first steps HMRC would take with a non-compliant Umbrella is to revoke their dispensation. Ask your providers to get either a written HMRC statement to indicate an active dispensation or ask a Director to formally write a letter to the same effect.

b. Dispensation – are the rules being followed correctly? Can evidence be shown that this is the case? Are receipts logged and filed or are they allowing a tick-box scenario from the contractor without any checks and balances? What audit processes does the Umbrella follow to ensure compliance at all times. Failure to apply these may lead to HMRC taking a global view on every contractor and request all benefits be repaid.

c. Receipts – do they tally with weeks worked? Are they valid for days on a clients site? Are they allowable and genuine? Again, failure to record these events will lead to full benefit repayment with interest and penalties.

d. Audit processes – how are they governed? What policies and procedures are in place to maintain compliance and what efforts, if any are used to educate contractors into claiming correctly.

e. REMEMBER – your contractors are NOT allowed to make a profit from HMRC

These are but a few recent key indicators used by HMRC to establish whether or not an Umbrella is policing expenses correctly. Many larger agencies are now conducting a detailed in-house review processes of all their current providers to sort the good from the not so good. If you run a PSL or are thinking about reviewing or starting one please remember to demonstrate the following, should HMRC decide to visit:

1. You have conducted a internal review of all your providers, usually by way of an in-depth questionnaire – with evidence supplied by the provider.

2. You have checked a providers audit standards, who do they use and to what level are they audited. Remember HMRC will not issue their own compliance standard and ‘approved dispensations’ alone do not demonstrate that a provider is OK!

3. In every instance, ensure that all of your contractors have been given the correct ‘independent tailored’ advice concerning which product is best for them and their circumstances. Secondly, that they have made their own choice regarding providers – via a PSL or otherwise and that this choice has been documented.

Finally, RACS Group constantly reviews is processes and procedures (every 6 months) and with no less than 4 independent audit bodies. We take compliance very seriously and to this end has placed us on over 65% of the Top 100 agencies PSL’s since 2008. We can assist you will all of the above if required.

Don’t get caught out and don’t settle for second best!

September 2010 - Newsletter - click to enlarge

2010-09-07T09:24:00.003+01:00

This issue contains the implications of HMRC's massive tax issue - underpaid or overpaid, what it means to you? The launch of RACS Group Jobs - a free jobs board for all recruitment agencies...

FREE JOB BOARD - LAUNCH

2010-09-03T12:13:00.002+01:00

RACS have just launched a FREE job board linked into some of the major online recruitment databases for you to post FREE job adverts http://www.racsgroupjobs.com/

All you need to do is register and post jobs and start to capture a significant wider audience for FREE http://www.racsgroupjobs.com/jobboard/cands/candLogin.asp

We look forward to you taking advantage of this FREE service and welcome your feedback

August 2010 - Newsletter - click to emlarge

2010-08-09T13:10:00.003+01:00

This monthly issue includes: Simplier Taxation - HMRC address the complexities of our Tax system inc IR35, Umbrella Expenses not iclusive or NMW, RACS Group enhanced website, Temporary Workplace analysis....

July 2010 - Newsletter - click to enlarge

2010-07-11T12:48:00.003+01:00

This monthly issue includes: The launch of our CIS Self-Employed Model. New Electronic Document Downloading from Professional Passport. Government promises - will they review IR35? RACS passes yet another audit standard - continued approach to compliance and up and coming news events!

June 2010 - Newsletter - Click to enlarge

2010-06-09T14:10:00.002+01:00

This monthly issue includes: HMRC's attack on Travel & Subsistence claims - Umbrellas under scrutiny. Agency incentives and referral costs, get the best deal through RACS Group. The emergency Budget, will it hold well for agencies?

May 2010 - Newsletter - Click to enlarge

2010-05-12T14:18:00.003+01:00

This edition of our Newsletter highlights the full product offering from RACS Group and some new items in the pipeline. The truth about expenses, dispensations and record keeping and finally, will the new Government really act in the interests of Contractors .... to read more click on the picture.

April 2010 - Newsletter - Click to enlarge

2010-04-12T14:07:00.005+01:00

Items in this addition include: FREE seminar on AWD, open to all owner manged recruitment agencies. RACS additions to their approved supplier portfolio. New HMRC compliance checks for businesses & clarification of contract lengths, the implications and safeguards! Plus many more items besides.....

Umbrella Detective Interviews RACS

2010-03-22T13:38:00.002Z

umbrelladetective.com interviews Terry Hillier the Managing Director of RACS Group and asks what he thinks of the umbrella companies that offer their services for free, what RACS has done to respond to this and the company plans for 2010 and beyond.

Read the full article at: http://www.umbrelladetective.com/interviews/view/4/Terry%20Hillier%2C%20Managing%20Director%20of%20RACS%20Group

March 2010 - Newsletter - Click to enlarge

2010-03-04T12:25:00.004Z

Items in this addition include: What the Tories would do if elected. RACS agency and contractor referral incentives - maximise on your referrals. HMRC attacks providers under employment claims....& how to financially safeguard monies paid to a provider! Plus many more items besides.....

February 2010 - Newsletter - Click to enlarge

2010-02-04T12:18:00.002Z

January 2010 - Newsletter - click to enlarge

2010-01-12T16:14:00.003Z

High Earners targetted by HMRC!

2010-01-12T10:29:00.003Z

Higher earners targeted in new war on tax evaders Middle-class professionals are facing an unprecedented campaign against tax evasion by government revenue inspectors.

By Christopher Hope, Whitehall Editor
Published: 7:30AM GMT 12 Jan 2010

Do you complete your tax form yourself? Doctors and dentists were identified yesterday as the first groups that HM Revenue and Customs inspectors would target.

Other white-collar workers including solicitors, barristers and accountants were expected to be targeted in coming months in what inspectors have named the “professionals campaign”.

Tax evasion is thought to cost the economy about £3 billion a year.
Previously the revenue has focused on people in blue collar occupations, such as publicans and taxi drivers, when fighting tax evasion.

It was disclosed yesterday that attention would switch to the accounts of professionals earning more than £100,000.

Tens of thousands of individuals were expected to be audited.

Experts accused the Government of unfairly seeking “easy pickings”.

They suggested that the decision to chase high-earning professionals for unpaid taxes had been forced on the revenue by the Treasury, in an attempt to raise funds to reduce the national debt.

The revenue said a “significant” minority of medical professionals were engaged in tax evasion.

Examples cited included not declaring fees for private work done for medical care providers, payments for private consultation work or cash sums for drafting medical reports. Under a three-month amnesty, hospital consultants, GPs and dentists have until March 31 to make a voluntary disclosure about any income they have not declared.

In exchange, they will have to pay the outstanding tax. They will also face a fine of 10 per cent of the amount owed — but the action will stop there.

However, anyone who refuses to disclose their unpaid tax, and is caught after the deadline, faces criminal prosecution and up to seven years’ jail. They could also find themselves “named and shamed” on the revenue’s website.

Tax inspectors can issue formal notices asking people to hand over bank statements and business records if they believe they have grounds for suspicions. They can also legally inspect business premises using their civil powers. Tax evaders could also be identified through their previous tax returns.

Mike Wells, the revenue’s director of risk and intelligence, said: “I strongly urge any in this group [the medical profession] who think they may have outstanding tax liabilities on their income to get in touch with HMRC and get their tax affairs in order simply and on the best available terms.

“The message is clear: contact us before we contact you.”

Phil Berwick, the director of tax investigations at the law firm McGrigors, said targeting the medical profession alone was “without precedent”. “It is people who are going to be averse to naming and shaming and probably in a position to make a payment to the revenue,”
he said.

“By offering an amnesty, HMRC is hoping to get a significant amount of tax into the Treasury’s coffers very quickly and at a reduced cost to itself. The parlous state of the public finances and the pressing need to reduce the deficit has probably forced HMRC’s hand to an extent.”

The middle-class initiative follows a previous revenue amnesty scheme to allow people with offshore bank accounts to declare how much tax they owed and pay a small fine. About 10,000 people made use of the scheme.

Richard Limburg, from Vantis Medical Group, the accountancy firm,
added: “It is likely that HMRC sees the medical profession, especially consultants, as easy pickings and this could raise substantial amounts.”

A British Medical Association spokesman said doctors with concerns should consult a financial adviser. A spokesman for the British Dental Association said: “This plan serves as a useful reminder of the importance of ensuring everything is up to date.”

RACS Group can assist all types of white collar workers with their remuneration - don't get caught out!

Happy New Year

2010-01-01T12:39:00.003Z

RACS Group would like to wish its contractors, clients and recruitment agencies a very Happy New Year. Thank you for all your support in the past and here's to a fantastic 2010.

Please remember to use our FREE online best advice tool (BAM) - at www.racsgroup.com/bam

Giving you a sound portal to genuine and generic advice by indicating which payroll method would suit you best!

RACS - Value Added Services

2009-12-06T13:19:00.004Z

RACS Group usually pioneers industry leading solutions to the contracting and recruitment sectors and this month is nothing different.

With the advent of the Pre-Budget report this week (9th December 2009) we anticipate a few earth shifting moves by the Treasury for contractors, umbrella companies and recruitment businesses. Perhaps the advent of some sort of debt transfer for umbrella companies who clearly abuse expense claims and dispensations.

We would like to think that our ONLINE BEST ADVICE MATRIX would certainly assist in protecting agencies and contractors alike against the potentially huge tax burden people are talking about.

We will aim to give you a full concise breakdown of our opinions together with what the industry is saying. Stay tuned on or shortly after the 9th December.

Umbrella Detective - NOW live!

2009-11-22T18:50:00.004Z

Independent Umbrella Review site umbrelladetective.com has now officially launched with a review of 60 out of 99 Umbrella Companies so far!

What they said about RACS Group - currently placed at number 4 out of a total of 99 umbrellas published on their site; heres what they said about us.......

RACS have been providing contractors with an umbrella solution since April 2007; previously to this they were known by a different name and rebranded when the current legislations were introduced. They are able to boast several accreditations to give their members peace of mind. The RACS website is very nice indeed, it is user friendly and full of information and downloads.

Our experience

When you call into RACS your call will be handled by an automated answering machine that will direct you to the appropriate department. The staff member that we spoke to at RACS was extremely helpful, full of knowledge and very professional. When you use the RACS Collective umbrella service you will be charged £5.00 per day worked, so if you work 5 days each week your fee will be £25.00 per week. There is no separate monthly fee and no hidden charges at all and if you do not work you will not be charged.

Expenses can be offset and RACS have a dispensation that will allow you to claim £5.25 per day for meals, if you work within a major city.umbrelladetective.com was told that there is no need for a receipt when your meal claims fall within this allowance. You can claim business expenses for travel and other genuinely incurred costs but will be required to send the original receipts in to RACS. You will not be able to claim your expenses online but they can be administered by email and post.

RACS asked us if our contract was IR35 friendly and the length of our contract to determine whether our workplace could be classed as a temporary one. Once they were satisfied that it could be, they gave us a personal illustration by telephone and offered to email this to us as well. The illustration that you will be given by RACS includes all fees deducted so is a true take home pay figure. We were very happy with the way in which the representative from RACS performed, we asked many questions and received knowledgeable, descriptive answers that were easy to understand.

When you become employed by RACS your holiday pay will be held back at 12.07% of your gross income and this can be requested to be paid out when you require it. You will also be entitled to Statutory Sick Pay (SSP) at the standard rates and will be covered by their business insurances. With compliance being key to so many contractors and agencies in the industry, RACS will not disappoint as they are accredited by Professional Passportand AEMC ensuring they have done as much as possible to give peace of mind to their customers and business partners.

Overall umbrelladetective.com found RACS to be excellent in all areas, we asked them a lot of questions to which they provided very good answers. They gave us a personal illustration and explained their services in clear simple terms that new comers to the umbrella industry will understand. We received the email from RACS within 10 minutes and it contained the illustration we were given by phone as well as a lot more information that we found very useful. umbrelladetective.com are sure that the services you will receive at RACS will be of the highest standard possible standard.

FREE Daily Horoscopes

2009-11-15T12:23:00.002Z

Free daily horoscopes in our blog.

Simply check any current news item or story and on the left hand side of the page will be our horoscopes section.

Find out what is in store for those at work, rest and play!

Another added service from RACS Group

Online 'BEST ADVICE MATRIX'

2009-11-12T12:43:00.003Z

To open the attached newsletter please just click on the picture.

Don't forget to try our online BAM for FREE at www.racsgroup.com/bam

Safeguard your Agency!

TEAM - goes GLOBAL!

2009-11-02T10:30:00.004Z

TEAM - The Employment Agency Movement with members in the UK and Europe has entered into a strategic alliance with NPA, The Worldwide Recruiting Network with global headquarters in Grand Rapids, Michigan, USA. Both organizations are engaged in the business of facilitating networking between their independent member agencies offering recruiting services across all sectors. The alliance has been formed to increase global business opportunities for the cumulative membership. Clients and candidates represented by these two networks will benefit from the worldwide connections and boundary-breaking reach that will be available from the combined networks of TEAM and NPA.

The arrangement provides TEAM members with a larger presence worldwide and greater opportunity to network. Members of both organizations will be able to place candidates across the globe and practically offer a “Total Recruitment Solution”. Liz Longman TEAM UK Director says “This is a fantastic opportunity for both TEAM and NPA members as the alliance will provide a Total Recruitment Service to Clients and Candidates alike with a combined network of over 600 locations worldwide across a wide range of disciplines. The reported combined shared fees of the two organisations in 2009 are over £6.5 million.

“NPA is excited to have a working relationship with TEAM. We believe there is value for NPA members, TEAM members and for the clients and candidates represented by each,” states Dave Nerz, President of NPA.

TEAM’s 300-plus members will gain access to NPA’s worldwide membership of nearly 400 premier independent recruiters to respond to the growing needs of UK and European based clients with demand for talent in North America, South America, Africa, and across Asia/Pacific. “To gain this access to a like-minded organization with such a global presence offers TEAM members and their clients some really exciting and innovative opportunities,” according to Simon Garbett, Chairman and Founder of TEAM.

About NPA, the Worldwide Recruiting Network. NPA is an international, member-owned recruiting network facilitating cooperative, split-fee placements between its members. In 2008, NPA members shared over US$9 million in split-fee revenue. Founded in 1956, NPA has 420 member offices with more than 1,500 individual consultants in 25 countries on 6 continents. www.npaworldwide.com

About TEAM – The Employment Agency Movement - TEAM is the largest independent networked group of recruitment and employment service providers in the UK. With TEAM a business gains all the advantages synonymous with a local agency whilst also benefiting from substantial support network. TEAM has over 300 branch locations across the UK with a combined £1 billion turnover with an estimated 26,500 placements and over 50,000 temporary assignments daily across the UK last year. www.jobsatteam.com

Business may be global …

… but knowledge is local

CARROT uses more of the RACS...

2009-10-29T11:38:00.005Z

All payroll companies offer similar core services: calculating payroll and tax obligations for each employee, printing and delivering cheques, and providing management reports. Payroll services can handle business for pay periods that run weekly, bi-weekly (every other week), semi-monthly (twice a month) or monthly.

However, working with Recruitment & Contract Services Ltd (RACS) can help to ensure that you have no nasty surprises from the Tax Man at the end of the year, by making sure you are aware of how much is due and by helping you to reduce the amount that you have to pay him. We can do this by forming a Limited Company for you. You retain full control of the company, becoming the sole director, shareholder and only signatory on your company bank account. You can choose to earn the national minimum wage and are paid the remaining monies through dividends, this can allow you to earn up to 25% more than PAYE.

Alternatively, you could become part of RACS Collective (umbrella services) which was formed to employ contractors who wish to work on PAYE but want to take advantage of HMRC incurred expense allowances in order to reduce their PAYE burden. We have currently agreed dispensations with HMRC with regard to lunch expenses, travel, accommodation, subsistence, telephone and internet bills. This option will most certainly benefit contractors earning between £100 and £350 per week, it would typically suit those individuals who are caught by IR35 or those who do not want the responsibility of running their own Limited Company. Again this could result in a saving of up to 15% in comparison to PAYE.

There are many variations that have to be taken into account to keep the balance right between yourself and the Tax Man, therefore a payroll solution can be selected to provide you with the full support and remove the stress, whilst being adaptable to your ever changing circumstances. It’s about expert advice every step of the way.

For more information about RACS services please contact info@racsgroup.com or telephone 0845 604 0571. More Bloggs:

· How Carrot Can Support Freelancers!
· The Benefits of Being a Freelancer

A fair COP for Contractors

2009-10-26T20:29:00.003Z

Professional Passport has launched The Contractors’ Opinion Poll (COP), a comprehensive survey that enables contractors to express their opinions on all aspects of the contracting marketplace. The quick and simple online survey gathers significant information from contractors on an anonymous basis and the results will be used to convey an accurate picture of the realities of contracting in the current market to key decision makers and government departments. COP will enable contractors’ collective voices to be heard above the din of commercial lobbying and vested interest – giving contractors a real opportunity to influence service provision and legislation. We will publish a summary of results to our readers once the survey is complete.

Crawford Temple, Professional Passport’s COO, said at the launch of the survey “Professional Passport works with many Government Departments and is in a position to influence decisions and provide real workable solutions to the issues faced by contractors. We are continually hampered by the lack of hard fact evidence available on contractors and we are finding that new regulation is being introduced based on little more than perceptions and anecdotal evidence. The results from the survey will provide us with the tangible data we need to support contractors’ views to Government and enable us to argue for less burdensome regulation.”

The most recent example that will affect contractors is the draft regulations for the Agency Workers Directive. The underlying objective of the AWD is to protect the rights of vulnerable workers, however the draft proposals go far beyond this and could pose a real threat to all contractors.

He went on to say: “There is clear evidence that the Government views the contracting market as a whole with no segmentation or differentiation between low paid vulnerable temporary workers (eg cockle pickers and agricultural workers) and those that most people consider to be professional contractors. In our experience professional contractors are certainly not seeking the protection this bill proposes. Without the evidence from the survey there is a real possibility that many professional contractors could become collateral damage of well intentioned but heavy-handed legislation.”

The Agency Workers Directive has a consultation period that expires on 11^th December 2009 so a short window of opportunity exists to influence thinking and protect the position of the professional contractor.

Professional Passport will be meeting with BIS to discuss the proposals and hopes the results from the survey will provide clear evidence to support the arguments.

As with any survey, the more people who complete it, the more weight the results will have. This is your opportunity to influence legislation that will have a direct impact on your business and income. The survey can be completed anonymously in just a few minutes at: http://FreeOnlineSurveys.com/rendersurvey.asp?sid=6w9nb5t9uvy2vmo653061

RACS is part of TEAM

2009-09-17T16:27:00.005+01:00

RACS Group is extremely delighted to announce that we have been approved as a preferred payroll services supplier for TEAM (The Employment Agents Movement).

TEAM currently supports and assists in excess of over 300 recruitment agencies across the UK with help from chosen professional bodies, regional and national meetings.

TEAM objectives are to promote co-operation and honourable dealings between Member firms listed in the TEAM Directory for their joint and individual benefit and for Member firms to offer international and national cooperation to businesses for the provision of employment and recruitment services.

Agency Workers Directive - Lawspeed View

2009-09-17T16:23:00.001+01:00

Forget Liverpool, Union leaders must be living in la la land if they think bring in the Agency Workers Directive now will protect one job” warned Adrian Marlowe Chair of ARC (the Association of Recruitment Consultancies) whose members have annual turnover of over £1bn, today 16th September.

Commenting on the agency workers directive motion passed at the TUC Adrian Marlowe went on to say, “If this directive goes ahead it will hit jobs and the economy hard”.

The Government should think twice of the true cost of implementing the directive at cost in excess of £2 billion, money the Country can ill afford. At a time when employers need flexibility and encouragement to take on new workers gold plating the directive will simply lead to greater unemployment.