Raise Standards in Recruitment Industry - Join REC Professional Standards Committee

1. The Recruitment & Employment Confederation REC Technology Webinar 26 March 2015 Recruitment and Employment Confederation

2. The Recruitment & Employment Confederation Aidan Anglin, Chair of REC Engineering Introduction 26th March 2015 Recruitment and Employment Confederation

3. The Recruitment & Employment Confederation Clare Flower, REC Head of Compliance PSC Vacancy 19th March 2015 Recruitment and Employment Confederation

4. Are you passionate about raising standards in the Recruitment Industry? • The REC Professional Standards Committee (PSC) is the body which considers serious breaches of the REC’s Codes of practice. This voluntary committee has the authority to issue reprimands, compliance orders and reviews and expel companies from REC membership. • The REC is looking for a new member to join the PSC. You will have extensive experience of: • running a recruitment agency that is a REC Corporate Member or working at a senior level within a REC Corporate Member agency (by the time of any appointment, you must be working for a REC Full Corporate Member, who has passed the REC’s Compliance Test) or • be a Fellow of the Institute of Recruitment Professionals (IRP) and • have sound experience and knowledge of supplying limited company contractors ideally in the technical/engineering or offshore sectors www.rec.uk.com Recruitment and Employment Confederation

5. Are you passionate about raising standards in the Recruitment Industry? • If you are interested in being a part of the PSC, please send a full CV with biography to compliance@rec.uk.com by 5pm on Thursday 2 April 2015. • For further details including an informal chat, please contact Clare Flower or Nicola Hope on 0207 009 2100. www.rec.uk.com Recruitment and Employment Confederation

6. Immigration Webinar: Current state of play and recent policy changes 26 March 2015

7. With you today Ian RobinsonFragomen LLP irobinson@fragomen.com 0207 090 9113 David Geary REC

8. The state of play

10. Getting a Tier 2 licence Prepare licence application Submit for processing Home Office visit? Request Certificates of Sponsorship • Document collection • One to three weeks • One to six weeks • Very likely for a start up or new firm • One to five weeks

11. Visa application • The UK can issue work visas faster than almost any other country. • Apply online, give biometrics and TB checks where needed. • Beginning on 17 March, visa applicants will be granted 30 days to enter the UK and need to pick up a Biometric Residence Permit (BRP) from a local Post Office.

12. Registered Traveller Scheme Application and Background Checks Initial Acceptance An email is sent once complete Enrolment No need for an appointment Full Membership You can now use the ePassport gates

13. Extending stay • Tier 2 visa extensions cost £514 (£564 from 6 April) • Applicants have the choice of: • Postal application, processing normally one to three months • Ten day priority postal for an extra £300 • Same day appointment for an extra £400 • The Home Office come to you for an extra £6,000

14. Immigration Update: Changes to the Immigration Rules

15. Changes to the immigration rules Will be implemented on 6 April 2015 Main changes to: • Visit visa category • Cooling off period • Increased minimum salaries for Tier 2

16. Visa visits: Consolidation of visitor visas from 15 to 4 categories

17. Changes to the cooling off period Old Rules New Rules • Those who held a Tier 2 Certificate of Sponsorship, issued after 6 April 2011, were subject to a 12 month cooling off period at the end of their assignment except in two scenarios: • Those who were switching from a Tier 2 ICT Short Term Staff visa to Tier 2 ICT Long Term Staff visa • Those earning over £152,100 (soon to be £153,500) Those who have not held a Tier 2 Certificate of Sponsorship issued for a period of 3 months or more in the previous year will not be subject to the cooling off period Existing exceptions (switching from a Long Term to Short term and high earners) will continue to apply.

18. Increased Tier 2 minimum salaries Tier 2 category Current salary Increased salary Tier 2 (General) £20,500 £20,800 Tier 2 (General) JCP exemption £71,600 £72,500 £155,300 Tier 2 (General)/Tier 2 ICT exemption £153,500 Tier 2 ICT Short Term Staff £24,500 £24,800 Tier 2 ICT Long Term Staff £41,000 £41,500 Tier 2 (General) qualifying ILR salary £35,800 for ILR apps made on or after 6.4.19 £36,200 for ILR apps made on or after 6.4.20

19. Other Tier 2 changes to note SOC code salaries will increase in line with inflation Tier 2 (General) monthly RCOS cap will increase for the month of April 2015 to 2,550 The RCOS cap will then decrease to 1,650 starting from May 2015 (N.B the cap will continue to roll over to the following month if not filled)

20. Biometric Residence PermitsOverseas Applications

21. From Summer 2015 all non-EEA migrants requiring a United Kingdom visa for more than six months will have to apply for a Biometric Residence Permit.

22. In-country applications for Biometric Residence Permits, for migrants extending their stay beyond six months, was completed in 2012 and to date 1.8 million have been issued.

23. Basic process - overseas applications PHASE 1 PHASE 2 PHASE 3 PHASE 4 Pakistan – 18 March 2015 India; China ++ - mid April 2015 Canada; U.S.; Taiwan;UAE ++ - end May 2015 All other countries – end July 2015

24. Basic process - overseas applications Apply through Visa4UK Enter travel date Enter collection point Receive decision letter Travel to UK on short term vignette Register at college/ work Collect BRP

25. Application phase – select collection point New screen on Visa4UK Mandatory UK Post (zip) Code field Could be based on sponsor address, a residential address, or ‘any other’ address

26. BRP collection in the United Kingdom Date of travel linked to BRP production Short term “travel vignette” valid for 30 days Re-issue vignette iftravel plans change

27. BRP collection in the United Kingdom Collection address specified in the decision letter Identity checks before BRP released Third party collection

28. Right to work checks First day check will still be needed Repeat check will be needed when BRP has been collected

29. Questions?

30. onshore intermediaries reporting, have you got it covered?

31. what is onshore intermediaries reporting? • From 6th April 2015 HMRC are putting recruitment agency directors on the hook for ensuring all temporary worker payments made throughout the supply chain are being reported to HMRC. • what is the issue? • … to tackle tax avoidance both onshore and offshore • offshore • offshore employers avoiding full UK PAYE tax and National Insurance Contributions (NIC) • onshore • workers paid as self-employed when they are not • this ‘false‘ self-employment avoids income tax and NIC • other ‘gross’ payments to workers may avoid tax and NIC

32. how the new legislation affects you • if you are the recruitment business who directly contracts with the end hirer, you will be liable for any underpaid tax and NIC for all self-employed workers in your supply chain – this is irrespective of who pays them • you will have to prove self-employment and that the worker was not subject to control by the hirer – very difficult to do! • if you are unable to provide sufficient evidence of true self-employment, you will be liable for the correct amount of tax and NIC – the financial risk is serious • HMRC has the ability to pass any unpaid tax/NIC liability onto the directors of the recruitment business making them personally liable • if paying an offshore intermediary, you must ensure that correct amount of PAYE income tax and NIC is being paid – if it is not, you are personally liable!

33. who needs to report? • You need to report if you: • are an agency • have a contract with a client • provide more than one worker’s services to a client because of your contract with that client • provide the worker’s services in the UK - or if the services are provided overseas, that the person is resident in the UK • make one or more payments for the services (including payments to third parties)

34. which payments need to be reported? • All payments where the worker has not been employed – either directly by the agency on a PAYE basis or by an umbrella company - must be reported. This includes all payments to: • self-employed workers • limited company /Personal Service Companies (PSCs) • partnerships / Limited Liability Partnerships • gross payment or payment to worker? • you may not know how much money the worker actually gets, but you will know how much money you paid to whoever supplied the worker to you. You must report the gross amount paid to the supplier. • umbrella companies • you must report the worker’s details to HMRC (e.g. name, address, NINo), but you do not need to report on payments made to the umbrella company

35. who needs to report & which payments?

36. what details need to be reported? • for workers employed by a compliant PAYE umbrella company, you only need to report the details of points 1-11 on the checklist • a reputable umbrella company should be able to provide you with these details securely, on time and in the HMRC-specified format

37. reporting periods and deadlines • the first report must be submitted by 4 August 2015 for all non-PAYE payments made between 6 April and 5 July 2015. • the ongoing quarterly reporting periods and deadlines are:

38. what are the penalties/fines? • if your report is late, incomplete or incorrect you may be charged a penalty. • these are given based on the number of offences in a 12-month period. These are: • £250 - first offence • £500 - second offence • £1,000 - third and later offences • if there are 12 months or more between offences, you will only be charged £250 for the first offence in the new 12-month period. • where there is continued failure to send reports or send reports late you may receive a penalty every day that you don’t send a report. • for incomplete and incorrect reports, manual penalties may apply on a case-by-case basis. • if you replace a report before the deadline of the next reporting period without being asked to, HMRC will consider this when they decide if you have to pay a penalty

39. how to minimise risk • an ongoing audit of your temporary workers and their intermediaries to determine how workers are paid, and to assess your risks – moving workers where necessary. • avoid self-employed workers throughout your supply chain – the financial risks are unquantifiable. • put in place and enforce a strict Preferred Supplier List (PSL) of service providers, ensuring you have no financial risks. • to minimise reporting, use compliant PAYE umbrella companies.

40. how to minimise risk • if you refer your workers to a reputable and compliant PAYE umbrella company, you can rest assured that they are employed and appropriate PAYE tax and NIC is paid. • they should be able to provide you with the HMRC-formatted report required for submission. • they should be able to provide advice tailored to your recruitment business. You’ll have questions... • how do I report if a worker has more than one assignment? • how to report if I pay in different currencies? • what if I’m a managed service provider paying second-tier agencies? • download our guide click here or get in touch with giant at 0844 324 7700, and we’ll help you with the specialist advice you need.