The Administrative Burdens Advisory Board (ABAB) conducted a survey of over 2,000 small businesses for feedback, where more than half of the respondents were businesses with 10 employees or less.1 ABAB is an independent board engaging with HMRC on the small businesses’ behalf.
The findings of the survey included that the respondents wanted:
- To spend less time on tax administration
- Clearer guidance on VAT and CIS
- Understanding of daily pressures of running their businesses
- Mechanisms for payments to work better for business
- Simplified government policies and legislation, to encourage innovation and growth
The above desires are in line with what recruitment agencies want also. They would like to concentrate on their core business activities of recruitment, a compliant and simple mechanism to run their worker payroll, and expertise guidance on employment tax, PAYE and CIS solutions.
Since the legislation changes of April 2016, some recruitment agencies are also preoccupied with the introduction of the National Living Wage and its impact on their business. The financial impact includes not just a higher wage, but also associated costs of NI and pension contributions and overtime pay.
What can agencies do? While passing on the costs to clients may be a solution that helps their bottom line, the agencies that can find a pain-free, compliant alternative will find themselves ahead of the game.
While their pay margins could be eroded by the added costs, they still want to retain valuable workers. Savvy agencies are looking to offer their workers added-value benefits, such as discounts at leisure centres and gyms, retail vouchers and wellness and healthcare services.
Many agencies are on the smart track by implementing a payroll process that smoothly flags where they need to reward an increase in wages. They understand their responsibilities to their clients, who want to acquire temporary workers from recruitment agencies that can provide evidence of preparedness. The financial penalties of non-compliance have been clearly laid out, and ignoring the recent legislative changes is not an option.
Centralus PLC’s primary concern is compliance. Our experts constantly stay updated on the latest legislative changes being made. Call us now to see how all necessary payroll administration remains compliant and accurate through our integrated systems.
1 Source: Tell ABAB Report
