News

Jun 22
1

Agency Growth: The Not-so-secret Formula For Recruiters

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Growing a recruitment business can be a paradox. You want your agency to increase its client base, and satisfy the demand for a quick response and a choice of skill sets. To do that, you simultaneously need to attract new candidates and retain those you have already painstakingly searched, interviewed, selected and supported.

While you fight to win business and fulfil contracts, you also want to offer contractors the best deal possible. You want your freelancers to know you can provide attractive assignments. With an increased worker database, the opportunities grow – so when the workers find work elsewhere, the impact on your agency is immediate.

Centralus PLC offers you growth. Our highly specialised business model has been developed specifically with your needs in mind. After 18 months of intent investment of expertise, resources and energy, our model has already benefited numerous agencies. Their workers are delighted with the benefits and have referred our services to other agencies and other workers.

Firstly, not only do we provide an efficient payroll service, but our dedicated expenses team are also on hand to help workers understand what expenses they can claim to increase their net pay. Further, we offer workers a benefits package that includes valuable healthcare services, such as dedicated healthcare phone lines to speak to a GP or a specialist. We provide the workers access to discounts on a multitude of leading high street stores. By outsourcing your payroll to Centralus PLC, your workers gain value and so does your agency.

Secondly, we protect you. We offer full employment liability and operate to comply with the latest legislation changes. We have insurance in place for Professional Indemnity, Employer’s Liability and Directors’ & Officers’ insurance. This protects all our clients and workers. It also protects your client base, and we can show you how to tell them that.

Thirdly, we help you look after your clients. Give them peace of mind, by showing them that you have sourced reliable, compliant and robust employment services, that take liability away from their doorstep.

Call our sales team now.

Ask us anything, we’re here to help.

Jun 16
0

Should temporary staff be taxed and put on payroll as employees?

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HMRC’s plans for consulting contractors, in the public sector, on being taxed and put on the payroll as employees has been challenged by a research reported by the Public Accounts Committee (PAC).

Research performed by governmental departments showed that HMRC received satisfactory results from 2,248 respondents and workers (out of 2,505) on temporary staff’s tax affairs. Specifically, from a tax perspective, this implies that 90% of temporary workers are compliant and contradicts HMRC’s claim that a mere 10% of contractors who should apply the IR35 rules actually do.

The Freelancer & Contractor Services Association (FCSA) does not understand why HMRC wants to penalise the temporary workforce since high levels of compliance are revealed and the Government relies on it to

fill in skills gaps. Putting temps on the payroll will inevitably increase costs, regulatory & administrative burdens plus the public sector workers will be treated differently from other freelancers.

With Centralus, that’s definitely not the case. Our objective is to offer the best payroll solution through a flexible approach, competitive rates and professional advice to suit your individual needs. So, call us now and find out how we can help you.

 

 

Source: OnRec Magazine. “FCSA calls for HMRC to abandon its consultation on public sector use of off-payroll staff as evidence suggests 90% compliance”. Online. 26 April 2016

 

Jun 10
1

Preparation for the new NLW has taken a toll on recruitment agencies

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The new National Living Wage of £7.20 per hour, for employees aged 25 and over, was introduced in April 2016.

Every employer, PSC and Limited Company is required to apply changes associated with their payroll in order to comply with the latest legislation. Otherwise, they will face fines of £20,000 per employee for non-payments, unless payments are made within 2 weeks.

Nearly half of UK recruitment agencies claim that preparation for the new National Living Wage (NLW) has had an impact on their business. According to a research done by Comensura, a managed service provider for temporary work, over 75% of recruitment agencies state that temporary workers’ pay rates have increased, up to 50p, thanks to the latest NLW implementation.

If your business has been affected by this, or any other legislation change, don’t hesitate to contact us.

Centralus PLC will help you streamline a wide variety of business functions regarding payroll & tax administration, insurance and benefits for CIS, PAYE and Limited Companies to ensure effective attraction and retention of staff.

Jun 08
1

Small Recruitment Agencies with Compliant Solutions – Why they are Ahead

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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

Jun 02
1

Announcing the First Centralus PLC Video Commercial: “Step onto solid ground”.

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Centralus PLC released its first corporate campaign video commercial, addressing the latest legislative changes in the recruitment industry that came into effect on April 6th. Using the creative concept of a businessman (representing the recruitment agency) balancing on a tightrope, Centralus PLC outlined the recruitment agencies’ struggling attempts to find their own balance amongst disguised employment, Supervision Direction & Control tests and HMRC reporting.

The video builds up the suspense of a man in despair trying to take the next step and eventually stepping onto the solid ground of Centralus PLC, securing a profitable and growing future for his recruitment business, far from the uncertainty of a questionable umbrella. “Our purpose is to create awareness to the UK recruitment industry and inform our target audience of our tailored-to-their-business compliant solutions in terms of: payroll, HR support, insurance as well as legal guidance “ Karly Ashworth, Centralus PLC’s Business Development Consultant, states. “Our mission is to provide the professional services necessary for our clients –the recruitment agencies- to transform their new business into growth.”

If you too want to step onto solid ground, please view the video below.

Jun 01
1

Payroll Services: Outsourcing or not?

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For many businesses one of the most difficult part is how to manage payrolls. It is very easy to make mistakes even if you have a proper knowledge of payroll procedures.

Furthermore, as an alternative companies of all sizes find payroll services an attractive and valuable solution to an in house procedure. Although, outsourcing payroll services might be a great alternative that cost you less and manage all your accounts as well as other tax responsibilities towards multiple areas.

However, small businesses and if their needs are straightforward, meaning fixed salaries or minimal changes in taxes, they prefer to manage their payable accounts internally.

While the majority of UK businesses deal with paychecks internally discover that is not so cost-effective as they used to believe. Unfortunately, many of them find out that it’s not always that cheap and easy solution to manage in-house payable accounts, especially, when the tax system constantly change and it is hard to follow.

In addition, at minimum, payroll procedures require at least a valuable accounting software and a wide training to use it, plus that businesses need to follow up all up to date changes, like tax requirements, deadlines, payrolls and much more.

Thus, companies with many employees that work under different time schedule per week, has a significant turnover, or have to pay payroll taxes for multiple states, an outsourcing payroll service can be very profitable by providing a great support to businesses, with time-saving and cost-effective solutions.

Payroll services depends from one company to another, however, the most common available services, among others, are the payroll administration, tax administration and filing, legislative guidance and hr support. Moreover, many payroll services offer the option of filing state and federal payroll taxes for your company. Additionally, this service most of the times is offered at a very low cost, however, keep in mind that your chosen company have to be liable for any interest rate or change even for the local and city tax modifications.

As a result, if you are in a state to outsource your payables, among other accounting responsibilities to a company, first you have to look for a stable and loyal provider.

It is important to double check if your provider supports many clients and offer stability and loyalty. Moreover, you can ask questions about the related features, the tax filing, the changes towards interest rates and taxes and how responsive they will be concerning customer service and after sales support.

Centralus PLC will help you streamline a wide variety of business functions regarding payroll & tax administration, insurance and benefits for CIS, PAYE and Limited Companies to ensure effective attraction and retention of staff.

May 18
1

The Risks Involved in Starting Your Own Limited Company

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What is a Limited Company?

A limited company is one of the UK’s most popular business structures. This entity is completely responsible for anything it does and its finances have no association with the owner’s finances. After paying Corporation Tax, whatever profits are made are owned and shared by the company.

Who owns Limited Companies?
Members and directors are considered owners of Limited Companies. Members are made up of organisations and/or people who own company shares. Directors often own shares but they are primarily legally responsible for running the company. Their main concerns are on performance, accounts and company records.

Legal Structures of Limited Companies
Limited by shares: the shareholders are financially responsible for the value of unpaid shares they own. As long as Company Directors follow the law, they are not responsible for unpaid debts if things go wrong.

Private company limited by guarantee: in case things go wrong, the organisation is financially supported (up to a certain amount) by Directors or shareholders. Shares are not offered to the public but shareholders are unlimited.

Public limited company (PLC): company shares are offered to the general public in order to raise funds and traded on the Stock Exchange. For making management decisions, a company secretary and at least two directors are needed. Member liability is limited to the unpaid amount on shares they hold. Before trading, shares of at least £50,000 must be issued to the public.

Private unlimited company: if things go wrong, all debts will be paid by Directors or shareholders. There’s no limit to members’ liability, therefore, less information is disclosed.

The Limited Company’s formation process is quite complicated and there are endless administrative, legislative and financial burdens that go with it.

What are the legal responsibilities of running a Limited Company?
All businesses must comply with UK company law. Every UK limited company must be registered with Companies House, which is the regulatory body. Within 28 days of your incorporation date, the Annual Returns (Form AR01) must be submitted by the directors to Companies House in order to ensure updated company details. Directors also submit Annual Accounts to Companies House. A Corporation Tax return (CT600) must be filed annually and pending liabilities should be paid within 9 months of the company year end. Income tax and National Insurance Contributions must be deducted for all employees, according to the Pay As You Earn (PAYE) Scheme, by the company. All employees must pay Income tax and National Insurance. According to the Companies Act 2006, company secretaries are no longer necessary and a sole director is able to run a company.

The Director’s role
A Director’s responsibility is to ensure the company meets its obligations:

  • Strive for success through experience, skills & good decision making
  • Obey company regulations as shown in its Articles of Association
  • Make judgements for the benefit of the company
  • Inform shareholders about a possible personal benefit from a company transaction
  • Retain company records (income, assets, expenses & liabilities)
  • Report to HMRC about any changes
  • Ensure transparency of company accounts
  • File accounts with Companies House
  • File Company Tax Return with HMRC
  • Pay Corporation Tax
  • Register for Self-Assessment
  • Send a personal Self-Assessment tax return annually (unless it’s a non-profit organisation & you haven’t received any pay or benefits)
  • Hire people to manage daily activities (ex. accountant)

How a Limited Company is set up / registered
First, owners need to register the limited company with Companies House (Incorporation) and provide 3 documents. The Memorandum of Association is a legal agreement amongst all shareholders stating the company formation (LTD or PLC), company name, objectives, the amount of initial share capital & names of the primary shareholders. Articles of Association are the written rules about running the company; voting rights associated with shares, board meetings, directors’ duties, how profits will be shared and relationships between shareholders and directors. Form IN01 includes all company details, information on shareholders & officers. There’s an annual fee of £15 – £30 to remain registered at Companies House.

Within 3 months of doing business (renting property, advertising, employing people, buying or selling), the owner will need to register for corporation tax. Companies are considered active for Corporation Tax purposes when they:

  • carry on a professional business activity / trade
  • buy & sell goods to make a profit
  • offer services
  • manage investments
  • earn interest
  • have other sources of income

In order to register online, the owner needs the 10-digit Unique Taxpayer Reference (UTR – which is found on all HMRC letters), the company registration number, the starting date of doing business (company’s first accounting period will start then) and the date annual accounts are made up to.

After registering for Corporation Tax, you will need to sign in and report it in your Company Tax Return.

If the owner receives a notice from HMRC to deliver a Company Tax Return, he must file even if he has losses or no Corporation Tax to pay.

A penalty will apply if the deadline is missed (12 months after the accounting period).

1 day after deadline

£ 100

3 months after deadline

£ 100

Another one…

6 months after deadline

+ 10%

of unpaid tax on Corporation Tax Bill

12 months after deadline

another +10%

of unpaid tax on Corporation Tax Bill

The £100 penalties increase to £500 if tax returns are late 3 times in a row.

Methods of Registration
There are four ways to register limited companies. You can do it online and be registered within 24 hours at a low cost of £15 where you can pay by PayPal, debit or credit card. Another choice would be mailing an Application Form (IN01) including a £40 cheque made out to Companies House, but that will take 8-10 days. Same day service is available at a fee of £100. Companies House must receive your application by 3pm and both envelopes, yours and the courier’s, must have “same day service” marked on the top left-hand corner. You can also use an agent or even a 3rd party software.

After registering the company, you will receive a “Certificate of Incorporation” confirming its legal name, the date of incorporation and company number.

Documents to be provided annually to Companies House
Depending on your Accounting Reference Date (ARD), which is the last day of the month of your company’s incorporation, the documentation below must be sent to Companies House annually:

  • Accounts (profit & loss or income & expenditure, if not trading for profit)
  • Balance sheet signed by the director
  • Auditor’s report signed by the auditor
  • Director’s report signed by the director/secretary
  • Notes to the accounts
  • Group accounts (when necessary)

VAT
Not all services and products are subject to VAT. Rates in many cases may differ.

If the taxable turnover of a company is over £70,000 annually, then you must pay VAT.

Setting up and operating your own limited company as a contractor can be time-consuming and risky; from filing and handling accounts, to completing VAT returns, preparing your self-assessment calculations, etc. The rules associated with SDC that have come into effect, as of April 6th 2016, may mean you are not legally entitled to offset your end of year expenses.

Centralus PLC is the best and safest alternative to consider. Our payroll specialists can take care of everything, leaving you free to concentrate on what you do best-your core business. Our qualified team will advise you on the best possible options to maximise your income.

We give you peace of mind in being fully compliant with current, constantly changing legislation.

For more information on being risk-free, you can reach us by e-mail or call us.
We will respond to any request within 24 hours.

0800 211 8109

[email protected]

May 16
1

SDC Rules (Supervision, Direction & Control) and the Latest IR35: How do they affect contractors?

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The intermediary legislation, otherwise known as IR35, has been introduced by HMRC to stop tax avoidance through disguised employment. Basically, the new regulation aims at employees who disguise themselves as personal service companies to take advantage of contractors’ tax benefits. Otherwise, when working through an employment intermediary, tax relief claims for commuting & subsistence are restricted.

Verifying if the IR35 legislation applies to contractors is quite complicated. How will contractors’ status be determined? How will they get paid? This legislation reflects a contract-by-contract basis.

Therefore, the question is: “Does the contract assignment fall inside or outside of Supervision, Direction or Control?”

How is SDC defined?

Supervision-managing a worker & ensuring specific work is done

Direction-directing a worker to carry out a job through instructions

Control-dictating what a worker should do and how to do it

Regardless if they fall under IR35 or not, all contract assignments should include the following details:

  • duration of job (starting and due dates)
  • specific working days
  • length of lunch time breaks
  • direct clauses showing that the client controls & supervises the contractors

There are two types of contracts. One is a contract of service, where the IR35 legislation applies, and the other is a contract for service, where the IR35 legislation does not apply.

The contract of service is an employment engagement referring to individuals who:

  • have an obligation to personally perform services to businesses or people directly, through an intermediary (a limited company) or others
  • are supervised, directed and controlled

The contract for service is NOT an employment engagement. This contract applies to self-employed individuals or consultants who:

  • control when, where and how services are provided
  • can terminate engagements through a notice, giving a specified time period
  • supply their own equipment needed for providing services
  • receive a fixed fee for completing a delegated assignment & are responsible for the process
  • can appoint substitutes to deliver services
  • are financially liable & at risk if specified services are not delivered in line with contracts

Identifying the IR35 employment status

How can you tell the difference between a disguised employee and a genuine contractor?

Besides the day-to-day management of business and the contractual wording, there are three main tests of employment to evaluate independent contractors’ working practices. If you fail even one of the three tests below AND use a limited company to trade, you’d be considered a “disguised employee”. Disguised employees are also known as “the Friday-to-Monday mob”, “tail-end charlies” or “permtractors” because they behave like regular employees but trade behind a limited company.

In this case, contractors are considered “INSIDE IR35”, and can not claim expenses. When someone passes all three tests, they are “OUTSIDE IR35” and can claim expenses at the end of the financial year.

Control: controlling the overall working process until the job is completed and delivered.

Can you substitute a worker assigned to a job?

Do you decide how to split your time at work?

Personal Service: completing the work you’ve been contracted to do.

Can you assign work to people?

Are you using your own equipment?

Do you risk your own money when buying resources, running costs or incurring overheads?

Mutuality of Obligation: obligations between client and contractor split in two parts:

  1. obligations within current contract agreement

Can you leave whenever you like?

  1. obligations after contract agreement

Once the work you were originally hired to do is completed, does the client feel obligated to give you more work? If so, must you accept it?

Contracts need to be reviewed in order for contractors to be assured that services are outside IR35. Otherwise, heavy penalties will apply for non-compliance due to falsified employment status. If HMRC uncovers false operation outside IR35, contractors will have to pay previous underpaid tax, a penalty equal to that tax and interest for the duration the additional amount was held. HMRC can perform a 5-year investigation and thoroughly review accounts for that time period. Tax tribunals are extremely stressful and costly, when it comes down to time and money. So, professionals must assess their SDC status to prove that they work as independent contractors if they want to work outside the intermediary legislation and claim expenses.

To sum up, limited company contractors occupying more than one contractor or use subcontractors are considered intermediaries. Keeping this in mind, full details of every worker and subcontractor will have to be reported to HMRC, every 3 months for a year, even if it was one day’s work. There are harsh penalties for not reporting and records must be maintained for three years.

Save your business from huge overhead costs, complicated administrative hassles and keep your contractors compliant. Our professional staff integrates their specialised knowledge in employment and tax laws with software development; assuring accuracy, efficiency and peace of mind. Through our secure solutions and support, you will inevitably strengthen your position in the market.

May 11
1

Centralus honours the industry’s finest by sponsoring the Global Recruiter Awards 2016

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Centralus is proud to announce this year’s associate sponsorship on the Global Recruiter Industry Awards 2016, celebrating the best of the best in recruitment. The sponsorship is part of Centralus’ ongoing commitment to support and honour the exceptional achievements in the UK recruitment industry, setting a fair example for others to follow.

Karly Ashworth, Business Development Consultant, explains: In challenging markets and times of change, like the past year, institutions that reflect the industry’s development and identify its innovators, play an important role in setting higher standards. For the past 6 years, the Global Recruiter Awards have been recognising companies that excel in performance, proving that business expertise and professional ethos can and should be rewarded. Our sponsorship seconds that, as Centralus shares the same values of stability, follows an innovative approach, maintains a customer vantage-point and transparency.

Centralus looks forward to building strong and mutually beneficial relationships with UK’s recruitment agencies, providing insights, quality payroll services, legislative compliance and employee benefits, so as to contribute to a better working world for all workers, clients and society overall.

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