When reading about the proposed limitations for Travel and Subsistence Expenses for 'PSC's, I wondered how the large consultancies would take it.
After all, only this week, I found myself interviewing a candidate from a large offshore supplier on behalf of my end client. He was to sit alongside other independent contractors for a reasonable length of time.
I thought the big firms wouldn't like it if they are prohibited from expensing their employees when they are travelling to client sites.
But then I noticed this in the consultancy document:
Professional Service Firms
For the purposes of these proposals employment intermediaries’ will be defined, in part (the complete definition proposed is contained above), as a business primarily in the supply of labour services. As such the definition will not include professional service firms that second staff to clients, as their business is not primarily in the supply of labour.
Perhaps my native English isn't that good. When do services not include labour? Has someone invented robots suitable for the office now? How can a large consultancy employee sat working on an end-client for 18 months be any different from an independent consultant from a small, growing company?
Can someone guide me through the differences between large and small, services and labour?
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Replies (2)
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Well...
if you take the context, this is designed to prevent employment intermediaries (agencies who supply labour) avoiding the tax rules, then you can see that this is not designed to target say a firm of management consultants, who provides consultancy services, or a firm of accountants who may second staff to their clients. The latter two are providing services, whereas the agency will provide labour. Agencies do not normally supply professional service providers.
Very grey I think ...
... what is the difference between going to Reeds to get an accountant to help with a one off project, say doing the projections for a proposed new venture, and getting your accountant to "rent" you one.
I appreciate that your accountant is primarily involved in providing professional services and the secondment in not their main business, where as for Reed it is, but as the OP says, the actual work being done is the same. Although many of the big firms will have a department which are effectively employment agencies.
I agree with Nichola on the legal/technical side and with the OP on the fairness side.
What is needed is the abolition of ERs NI, people should be able to choose whether they want to be employed, get a lower salary but legal rights for holiday, sick pay etc or to be self-employed and get a higher rate of pay but no benefits, and there is a case for all travel to be disallowable, as really it should be built in to the fee for the self employed, or the price of the employers product/service!