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Talented people do talented business.

That’s exactly what was reflected at the Global Recruiter Awards 2016 on Thursday 23 June at Café de Paris, London.

The recruitment industry’s finest were there, contributing to a fantastic atmosphere, celebrating the very best in each one of the 15 award-winning categories. The event was filled with glamorous smiles, inspiring ideas and overwhelming recruitment talent.

Centralus PLC was proud to be this year’s associate sponsorship on the Global Recruiter Industry Awards’ Best Client Service category, as part of our ongoing commitment to support and honour the exceptional achievements in the UK recruitment industry, setting a fair example for others to follow.

All the nominees were successful businesses and individuals performing outstandingly within the recruitment market, each in their own specialty.

In the Best Client Service category we were happy to see Understanding Recruitment Ltd, Oliver James Associates and Pod Talent, with the last candidate winning the award!

Centralus PLC wants to congratulate everyone –winner or short listed- for their amazing achievements, enthusiastic commitment and innovative spirit that take the recruitment industry to the next level.

Among the VIP guests was the Centralus Chairman and CEO, Mr Jonathan Michael Beckerlegge, who gave us the exclusive interview, below:

Q: Good evening, Jonathan! So good to have you here! So, what did you think of the Global Recruiter Awards?

JB: Hello! Thank you for the warm welcome, it’s actually very nice to be here! These awards are an exciting chance to see the innovators in recruitment. With the challenges recruitment faces today, people and organisations can identify the opportunities that will make a difference in this industry.

Q: What are some of the current challenges affecting recruitment professionals today?

JB: The first challenge is the current skills shortage in the UK, particularly in STEM* positions. UK firms are increasing IT spending by over 60%, and there are more than half a million-job vacancies in smaller companies that are not getting filled. The pressure is on to find candidates for permanent roles – and the temporary positions are increasing in number as well.

Q: Specifically, for the temporary employment market, what affects the agencies in sourcing good workers?

Linked to attracting candidates is retaining talent. Within the nature of temporary work, agencies have the extremely difficult task of keeping their worker database active with talented workers. When workers change to a different agency, the first agency feels the impact immediately. Those agencies that give workers added value are performing better – and added value can be so much more than just a slightly better pay.

Q: What’s better than higher pay?

JB: Agencies can offer workers’ benefits and services, making their agency an attractive source of employment. Bear in mind, that higher pay does not always mean workers can afford access to equivalent services, such as those that we provide.

Those agencies that have signed up with Centralus PLC now provide healthcare services to their workers, and discount vouchers from high street stores. The workers are delighted with these services, and are less likely to change agencies when these benefits are available.

Q: What about the recent legislative changes?

JB: The legislative changes in April have hit the agencies in a fundamental function – the way they pay their temporary workers. HMRC has extended the tax liability as well, to agencies and their client base, making many agency owners anxious that their outsourced payroll providers are compliant.

Many have adopted a blanket policy of using PAYE – or some workers have switched to using PSCs. Neither of these approaches are necessarily what improves pay processes for workers, agencies or even the employers providing the temporary roles.

Q: What would be a better situation for all involved?

JB: I would suggest a compliant model, addressing these new regulation changes. Centralus PLC specialises in payment services and we have experts in payroll and financial systems. Our board has invested many resources in the last 12 months to develop a new employment model that is compliant and also attractive to workers and agencies, extending to the agencies’ client base.

Furthermore, we take on employer liability. We have insurance for Professional Indemnity, Employer’s Liability and Directors’ & Officers’ insurance. This protects all our clients and workers.

Q: What else can you tell us about this model?

JB: We developed this model with the agencies in mind. We know what challenges they are facing. We realise that they wish to spend more time on recruitment and less time on burdensome administration and compliance activities. We know that the agencies that have chosen us have seen happier workers and clients, leading to increased businesses growth.

Agencies who have grasped the vision of Centralus PLC understand that their success is our success, and vice versa.

Q: Thank you for taking the time to share all this insight with us. Enjoy your evening!

A: Thank you.

* STEM = Science, Technology, Engineering and Mathematics

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?

2. 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.