How we Engage the Workforce

We engage workers in a number of different ways and we will summarise what these methods are:

CIS - A self-employed engagement which can be used for construction workers NOT subject to SDC. These workers are subjected to tax under the rules of CIS

Sole Trader - A self-employed engagement which can be used for construction workers NOT subject to SDC. These workers are generally paid net of a 20% on account tax payment.

Umbrella without expenses - An employed engagement where the worker is subject to income tax and national insurance.  These workers are completely unaffected by the new rules as they do not claim expenses.  Approximately 39% of umbrella workers never claim expenses.

Umbrella with expenses - An employed engagement where the worker is subject to income tax and national insurance. These workers are affected by the new rules if they ARE subject to SDC. Approximately 61% of umbrella workers claim expenses.

Limited Company - Workers supplying services via their own limited company are unaffected by the legislation.

SEP without expenses - A hybrid model where the worker is self-employed for employment law but subject to PAYE and NI for tax purposes. Approximately 65% of SEP workers never claim expenses. These workers are completely unaffected by the new rules as they do not claim expenses.

SEP with expenses - A hybrid model where the worker is self-employed for employment law but subject to PAYE and NI for tax purposes. Approximately 35% of SEP workers claim expenses. These workers are affected by the new rules if they ARE subject to SDC.

In summary, if a worker is subject to SDC they can neither be self-employed for tax purposes or claim expenses. However, there is one proviso. Our tax advisers have stated that IF there is an expectation that a worker will be expected to travel to multiple sites with the same end user then he or she may still benefit from expenses regardless of the presence of SDC.

If you have any questions regarding the legislation, our categorisation or the effects, please do not hesitate to contact us on 01923 690 910 or by email to enquiries@bar2.co.uk.