Getting it Right

I-PAYE offers UK and Overseas Recruitment Agencies a compliant alternative to their workers operating on a PAYE basis. 

For Agencies placing workers on assignments in the United Kingdom I-PAYE offers an MSC and IR35 compliant payment model free from risk under the assignment of debt providions. 

For Agencies placing workers on assignment in Europe and furtherafield I-PAYE offers a local complaint solution to ensure that there is no risk under any chain of liability regulations or contractual indemnities.

UK Assignments

It is clear from the MSC area of HMRC website and guidance given that there are only three viable options when contracting in the UK.

• Workers become an Employee of the Agency, with PAYE and National Insurance applied to all earnings; or
• Workers become an Employee of an Umbrella Company, with PAYE and National Insurance applied to the salary / wages element of payments only.  A typical Umbrella will reimburse expense free of PAYE and NI; or
• Workers set up and run their own "Family" or "Personal Service Company", which they have control over, both financial and day to day.

Whilst there many be many mass marketted schemes involving the use of offshore, self employed or employee benefit trusts, the above are the only options clearly identified as outside the scope of the MSC Legislation and IR35.  Many of the schemes currently being presneted with "opinion" are likely to be subject to imminent HMRC review and if identified as a MSC may lead to the assignment of underpaid Income Tax and National Insurance.   

European Assignments

Many European Countries contain within their own rules an equivalent of the assignment of debt provisions.  These are more commonly known as the "Chain of Liability" and are backed up by specific clauses within the "Frame Agreements" that insist that all parties do what is required both for Taxation and Social Security purposes.

We would encourage any agency placing workers elsewhere in Europe to contact our European Team to discuss the specifics of the potential assignment.

Generally speaking placing an EU Citizen of one country to work in a secondary country will result in Income Tax and Social Security being due in the secondary country from the first day.  There are exceptions to these rules, but these must be looked at on a case by case basis.   Please note that the general interpretation of the 183 day rule contained within the model OECD DTA is incorrect as the definition of Employer is much wider than simply who pays the wages / salary.

Overseas Assignments

Overseas assignments outside of the EU / EEA have various traps for an unwary agency or worker and specialist advice on issues such as work permits, double taxation and social security is adviseable.

We would encourage any agency placing workers elsewhere in the world to contact our Overseas Team to discuss the specifics of the potential assignment.