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  • Tesco Workers Make Equal Pay Claims Oct 9, 2018

    More than 1,000 Tesco workers have joined forces to take action against the country’s largest grocer in an equal pay war.

    Law firm Leigh Day has lodged 1,000 claims against Tesco, and estimates that the legal action could cost the supermarket as much as £4billion in compensation payouts.

    It surrounds claims that some employees in stores have been paid ‘considerably’ less than staff in distribution centres – in a dispute that started in February.

    Tesco’s store assistants – which are predominantly female – claim they’re earning up to £3 an hour less than their warehouse colleagues, which are largely male dominated.

    The supermarket currently pays distribution centre workers in excess of £11 an hour, compared to customer facing shop staff which earn around £8 an hour.

    Leigh Day – which announced it was taking action in February – is running the case on behalf of shop floor workers that claim they are paid “considerably less than their colleagues in the distribution centres”.

    It said claims could apply to as many as 200,000 Tesco employees, meaning estimated pay shortfalls could reach £20,000 and the final bill for Tesco could be as high as £4 billion.

    The employment tribunal added it expects even more shop floor staff to come forward over backdated pay – which could go as far back as six years.

    Lawyer Paula Lee, at Leigh Day, said: “We’ve had an incredible response to the announcement of this legal action. Many proud members of staff have realised that this claim is not anti-Tesco, but it is to ensure that the work done in stores and distribution centres is recognised as being of equal value; not the same work, but work of equal value and that they should be paid the same as their colleagues in distribution.

    “Both store staff and distribution staff play an essential role in making billions of pounds for Tesco executives and shareholders, they should both be paid equally for what they contribute to the business.

    “The concept of ‘women’s work’ is an outdated approach to employment from the middle of the last century which needs to be corrected.”

    A Tesco spokesperson said: “We cannot comment on an ongoing legal matter, but we will be defending this claim about equal pay. Tesco has always been a place for people to get on in their career, regardless of their gender, background or education, and we work hard to make sure all our colleagues are paid fairly and equally for the jobs they do.”

    Tesco’s potential pay-out follows a contract overhaul at Sainsbury’s that could leave thousands of workers worse off.

    On 1 September, the grocer’s minimum wage will increase from £8 to £9.20 an hour.

    However, in doing so, it’ll scrap staff bonuses, reduce night shift pay, and axe premium Sunday rates.

    It’s a move the grocer admits will leave up to 9,000 of its most loyal workers out of pocket –some of them losing £3,000 a year.

    Sainsbury’s said all workers will be reimbursed for losses for 18 months after the changes kick in – however MP Siobhain Mcdonagh has slammed it as a kick in the teeth for workers.
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  • Intermediaries Divided on The Proposed Changes to The Apprenticeship Levy Oct 9, 2018

    Chancellor Phillip Hammond’s has proposed changes to the Apprenticeship Levy that was introduced in November 2016. The Chancellor intends to provide £90 million in Government funding that will allow employers to use the apprenticeship fund for enhanced training to apprentices in the UK.

    The Government also plans to provide an additional £5 million to the Institute of Apprenticeship for developing new standards and developing quality courses. The old frameworks will gradually be phased out by the academic year 2020-21 and new standards will apply.

    The original legislation had received a lot of criticisms from intermediaries that supply temporary staff.

    In a survey carried out by the Freelancer and Contractor Services Association (FCSA) around 14 percent of intermediaries had stated that the Levy could jeopardise their businesses. The Levy represents a tax on employers that can be used for funding training of apprenticeship in the UK.

    According to the CEO of FCSA, Julia Kermode, the Levy adds a financial burden on intermediaries such as recruitment firms and umbrella companies that have artificially high payrolls. The sector has already seen a lot of taxation burden in the past few years.

    Mark Bull, the CEO of the Randstad recruitment firms’ UK and Ireland Division had also criticised the law stating that the levy is ineffective and unfair. He is also critical of the proposed changes stating that they are not enough.

    The Government has not addressed the problem of lack of access to the funded training to temporary intermediaries. This is despite the fact levy is charged on their payroll. The levy remains a payroll tax on intermediaries that is unjustifiable. The agency temporary workers are not getting any benefit despite the fact that they stand to benefit the most from apprenticeship training. The system is flawed, ineffective, and unfair.

    However, Neil Carberry, the CEO of the Recruitment and Employment Confederation (REC) has welcomed the proposed changes in the Levy. He has adopted a more conciliatory tone in regards to the proposed changes that would result in increased flexibility and providing benefits to a lot of workers in the form of improved training. This will also assist companies that had been paying the tax but not able to benefit from the program.

    According to Carberry, the Government’s actions will show whether they are pro-business. He stated that the Government should also suspend the proposed IR35 reforms as it punishes compliant businesses and encourages tax avoidance.
  • Employees from McDonald’s, TGI Fridays’ and Wetherspoon’s Plan Union Strike Oct 6, 2018

    Employees from three prominent hospitality chains are set to participate in an organized UK strike one month from now to bring attention to low pay and poor working conditions prevalent in the industry.

    A rally has been organized at Leicester Square in London, whereby workers from McDonald’s, JD Wetherspoon and TGI Fridays have organized a simultaneous walk-out from their restaurants/pubs on the 4th of October.

    The lack of trade union recognition within certain businesses/establishments is another aspect that the workers are protesting.

    Workers from two Wetherspoon pubs in Brighton, McDonalds staff in Brixton, Crayford, Cambridge and Watford, and TGI Fridays employees in Milton Keynes, London’s Covent Garden and Stratford will be participating in the strike.

    The Bakers, Food and Allied Workers Union (BFAWU), said the workers are “part of a growing movement of workers who face similar conditions of poverty pay, precarious contracts and lack of union recognition”.

    Anti-poverty charity War On Want has joined the Union in co-ordinating the strike as they are on the lookout for new members.

    The BFAWU was the driving force behind the so-called ‘McStrike’ when McDonald’s UK workers walked out for the first time last September.

    May 1st saw another walk out from the staff, the second time this year.

    Wetherspoon’s staff are going on strike for the first time in the company’s history, and the union mentioned that next month’s strikers were inspired by the walkouts.

    Next month’s action will mark TGI Fridays staff’s eighth strike since May this year.

    Hospitality workers from four continents will take part in the strike, the BFAWU said.

    “The days of poverty pay, insecure contracts and lack of respect for workers are numbered. A living wage of £10/hr for all ages, security of hours, and our right to a union are the basic rights we are fighting for.”

    The BFAWU said UK workers were part of a growing global movement, and that actions from fast food workers around the globe have been planned for the same day to campaign for union rights, decent wages and working conditions.
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  • IPSE Criticised TUC’s Report Findings Oct 5, 2018

    The Association of Independent Professionals and the Self Employed (IPSE) has criticised the report recently published by the Trades Union Congress (TUC). The organisation that represents contracting professionals in the UK has stated that the report’s finding that suggests self-employment cuts pay of employees is ‘misleading’.

    According to the TUC, the earning of about half of self-employed workers in the country aged 25 or above is less than the national minimum wage (NMW). The low pay has been attributed to fraudulent employers who deny employment rights to self-employed individuals, encourage them to dodge taxes, and pay less than the NMW.

    IPSE Dubs TUC Report as Fallacious
    A lot of irregularities have been found to be present in the TUC report. The report does not mention the fact that most of highly skilled contracting professionals prefer to offer services to employers through umbrella companies.

    Andy Chamberlain, the Deputy Director of Policy at IPSE, had noted that the analysis of TUC was not supported by testimonies from the contracting professionals. In fact, a number of surveys have revealed that self-employed individuals are contended on average as compared to employees.

    According to Chamberlain, the self-employed individuals cited in the TUC analysis were most probably among the 1.5 million individuals who work part-time such as students or individuals who earn supplementary income. Most of them are happy with the income they receive from the gig work.

    He stated that instead of misleading the public regarding self-employed individuals, there is a need for overcoming challenges faced by the contracting professionals. This includes addressing issues relating to timely salary payment, navigating tax requirements, and fair deal on Universal Credit and maternity pay.

    A lot is needed to be done to protect the rights of self-employed individuals in the UK. Citing the association’s report with the Community Union, Chamberlain showed that the percentage of self-employed people, who are vulnerable to exploitation, is between 9 to 13 percent of the total flexible contracting workforce.

    To prevent low pay of self-employed individuals, a clear legal definition of self-employment is required. Moreover, IPSE has been persuading the Government to provide training to contracting professionals to avoid being exploited by scrupulous employers.

    In light of these facts, Chamberlain had stated that conflating sham self-employment with the gig economy is a mistake. These types of analysis are nocuous for the majority of self-employed contracting professionals who are contented with the work. In a wider aspect, it also harms the UK economy as self-employment drives a recovery in employment and contributes millions to the GDP every year.
  • Legal Action Launched Against April 2019 Loan Charge Oct 4, 2018

    A group of contractors has launched a judicial action against the April 2019 Loan Charge. The outcome of the Judicial Review will decide whether HM Revenue & Customs (HMRC) will be able to collect penalties, tax, and interests owed by contractors involved in loan arrangements next year.

    The April 2019 Loan Charge introduced by the Finance (No. 2) Act 2017. It is a nocuous and retrospective charge that has given recipients of contractor loan schemes until 30 September 2018 to register and arrive at a settlement to avoid a hefty tax charge next year.

    The group called 2019 Loan Charge Action Group (LCAG) has launched the £1 million legal challenge and vowed to start the review process in a few weeks.

    The first ruling of the review is expected to be heard in September 2019. However, the initial review by the High Court will cost around £500,000. The amount is in addition to the £250,000 required for the potential hearings by the Court of Appeal and Supreme Court.

    Good Chances of Success
    Robert Venables Q.C., an acknowledged expert on taxation who has been appointed to fight the case against HMRC, has stated that there is a good prospect of success.

    He has stated that the 2019 Loan Charge was not compatible with the European Convention on Human Rights. As a result, there are high chances that the courts will rule the charge that is levied on loans dating back to 1999 as an infringement on individual’s rights of peaceful ownership of their possessions that include cash.

    Venables will request the court to prevent HMRC from collecting retrograde taxes under the loan charge since it’s against the UK Human Rights Act of 1998. The argument will be based on the fact that HMRC has only statutory discretion but lacks an absolute obligation to collect taxes.

    At the moment, HMRC is not pressing on contractors to come to an agreement. This is possible because the tax authority is anticipating the Loan Charge due date to impose backdated charged that LCAG has dubbed immoral.

    According to Venables, if the groups are successful in getting a judgment against HMRC, contractors could challenge any chargeback through proper judicial processes. However, one point raised by LCAG is that even if the outcome is in their favour, Accelerated Payment Notices (APNs) will likely remain.

    LCAG has advised contractors to continue making the minimum contributions of £600 pounds until the case comes to a definite conclusion. Every contractor will stand to benefit from the court outcome. Fighting the case will not be possible without the support of the members.
  • REC Urges Government to Avoid Hasty Decisions Apropos IR35 Private Sector Reform Oct 3, 2018

    Recently the UK Chancellor had called for an earlier than usual Budget in order to avoid the clash with Brexit negotiations in November. Mr. Philipp Hammond had said that the Budget will be announced three weeks earlier as compared to last year. It will be announced after the high-profile Brexit summit in Brussels in October.

    However, the Recruitment and Employment Confederation (REC) has advised to the Government that it should not rush through the decision regarding the private sector IR35 reform. In a response submitted by the REC, the damning impact of the non-payroll working rules have been highlighted. The agency had warned the Government that extending the reform would be ineffectual and even harmful for the jobs market.

    The UK businesses require support and backing from the Government instead of opposition in light of the uncertainty caused by the impending Brexit. The report had revealed the following after a survey of the REC members.

    42 percent of REC members had stated that they have already seen an increased in noncompliant intermediary models after the Government had imposed IR35 on the public sector last year.

    72 percent of REC members reported serious fears due to early IR35 implementation in the private sector. They believe that this would result in tax avoidance schemes that would hurt rather than benefit the Treasury. About the same percentage of members had found that this would result in reduced flexibility in the job market due to which businesses would face difficulty in accommodating to regulatory changes.

    According to the CEO of REC, Neil Carberry, everyone should pay the right taxes. However, hasty implementation of the IR35 reform in the private sector would encourage noncompliant rogue organizations to carry on their tax avoidance schemes. It would instead harm the umbrella companies and workers who comply with Government’s tax regulations.

    The rogue schemes have increased in the past few years. Most of the recruiters believe that the Government should revaluate the IR35 reform. Mr. Carberry had stated that the employment status assessment should be completed before making any changes in the tax laws.

    Due to the grave uncertainty surrounding the Brexit, the Government cannot afford to cause further anarchy in the job market. The full assessment of the proposed extension of non-working rules in the public sector should be made before making further announcements. This will ensure that the compliant companies and recruiters don’t lose out due to the IR35 private sector reform.
  • Early Autumn UK Budget 2018 Date Announced Oct 1, 2018

    The Treasury has fixed the date of the UK Budget 2018 on Monday, 29th October 2018. This was announced through an update on its website. The news comes as a big disappointment those who were hoping for a late announcement of the budget.

    According to an IR35 specialist and former tax inspector, Kate Cottrell, the early autumn Budget would result in a short timetable for private sector businesses to prepare for the IR35 reform.

    The off-payroll working reform was first introduced in April 2017 in the public sector. The reform had shifted the duty of determining contractors’ tax status to public sector bodies. However, many agencies including the REC, Qdos, ICAEW, and others had criticised the legislation. Even a research carried out by HM Revenue and Customs (HMRC) had discovered teething problems including high costs due to the implementation of the reform.

    Many tribunal cases have gone against the HMRC questioning the validity and reliability of the CEST tool used by employers to determine the tax status of contractors. The tribunal had come to the conclusion that the Mutuality of Obligation (MoO) is a critical requirement in any contract that is ignored by the CEST tool when determining employment status.

    Another ex-tax official, Ms. Carolyn Walsh, has alleged that after the public-sector implementation of IR35 reform last year, paperwork requirement and tax avoidance have increased. She had said that she will discuss the impact of public sector reform during a meeting with her local MP on 12th October.

    According to Ms. Walsh who owns CWC Solutions, Budget 2018 will probably not announce the extension of IR35 to the public sector. That said, she anticipates that some changes may be announced regarding the off-payroll working rules such as the employers having to submit reports to HMRC similar to CIS300 that is submitted in the construction sector under threat of fines.

    In addition, the HMRC may also respond to alternative reform models have that have been forwarded during the IR35 consultation. By the Budget 2018, it would be a little above three months for the agency to consider the response from the professional agencies.

    Ms. Cottrell who has co-founded advisory firm Bauer & Cottrell has stated that a response to the private sector IR35 consultation is expected with the Budget paper that everyone is anxious to here. In case the Government does decide to go ahead with the reform, it should give an extra month for the private sector companies to adjust accordingly.
  • Employees to be Handed Stake in Firms Under Labour Plan Sep 29, 2018

    Workers will receive a bonus of up to £500 a year under Labour’s plans to force all large companies to give staff shares in their firms.

    John McDonnell, the shadow chancellor, will reveal details of the dividend payments that will flow from the scheme – vowing that 11 million workers will enjoy “the rewards of their labour”.

    The “inclusive ownership funds” are a key plank of Mr McDonnell’s determination to make Labour’s manifesto for the next general election “more radical than the last”.

    The idea is for the first £500 from the rising value of company shares to go to each worker – with the remainder ploughed into “a social dividend”, to be spent by the government on public services.

    Speaking at the Labour conference in Liverpool, Mr McDonnell will say: “Workers, who create the wealth of a company should share in its ownership and, yes, in the returns that it makes.

    “The evidence shows that employee ownership increases a company’s productivity and encourages long term thinking.

    “The dividend payments workers will receive will be up to £500 a year. That’s 11 million workers each with a greater say, and a greater stake, in the rewards of their labour.”

    The shadow chancellor will say that the shares will be “managed collectively by the workers” and deliver the “same rights to have a say over the direction of their company”.

    The promise comes despite Mr McDonnell revealing, a year ago, that he was war-gaming for a run on the pound and the flight of capital from London if Labour wins the election.

    Aides acknowledged that the £500 pledge depended on the stock market rising, with the exact amount paid out varying from company to company.

    The estimate of reaching and exceeding the £500 cap for workers’ dividends was based on companies’ past and expected performance, the aides said.

    Companies would not be forced to pay out dividends but, if they did, the policy would ensure that staff – as well as private shareholders – benefited from the firms’ success.

    The “ownership funds” would have to be set up by every company with more than 250 employees, as part of Mr McDonnell’s plans for an “irreversible shift in wealth and power in favour of working people”.

    He believes the 2017 manifesto – while popular, by pledging the renationalisation of water, energy and rail services and higher taxes on top earners and corporations – was not radical enough.

    In July, as The Independent revealed, he backed a trial of universal basic income – replacing means tested benefits with an unconditional flat rate payment to all citizens – to combat work insecurity.

    Labour is also exploring more rapid automation of jobs, to improve the UK’s miserable productivity record, and a shorter working week.

    he compulsory ownership funds will cover at least 40 per cent of the private-sector workforce, Labour believes, but smaller companies will also be urged to set them up.

    Every year, companies would transfer at least 1 per cent of their shares into the fund, up to a maximum of 10 per cent.

    Workers would not be able to sell or transfer their shares, which will be held through an “asset-lock” mechanism similar to the one used by the department store John Lewis.

    Labour believes that national fund – for dividends above the £500 cap – will deliver £2.1bn for public services by the final year of the next parliament.

    The Conservatives condemned the proposal as “yet another tax rise from a party that already wants to hike taxes to their highest level in peacetime history”.

    “It would make it harder for local businesses to take on staff and pay them a good wage,” said Liz Truss, the Chief Secretary to the Treasury.
  • Chancellor BREAKS Promise to Reduce Tax on Self-Employed Sep 28, 2018

    Philip Hammond has infuriated the white van man after breaking his promise to reduce a tax on the self employed. The Chancellor had promised to cut class 2 National Insurance Contributions (NICs) giving 3.4 million self employed workers an extra £130 in their pockets.
    But he announced that he was performing a U-turn and reversing the cut.

    The plan has now been permanently shelved with ministers saying it “would not be right to proceed during this parliament” because of the potential impact on lower earners.

    In last year’s budget Mr Hammond delayed the increase in class 2 NICs because of concerns over self-employed people with low profits.

    At that point he claimed that the government was “committed to abolishing Class 2 NICs to simplify the system”.

    There are no plans to find an alternative way to deliver the tax cut and it is likely to save the Government £360 million.

    John O’Connell, chief executive of the TaxPayers’ Alliance said: “Millions of self-employed people in Britain who were promised lower and simpler taxes next year will be extremely disappointed by this announcement.

    “High taxes on the self employed discourages entrepreneurship and risk taking. If the government wants to make contributions more equivalent between the employed and self employed, then they should instead give those on salaries a tax cut.”

    There was also anger from small business representatives.

    Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “The self-employed community has been let down today, missing out on a promise to reduce their tax burden.

    “This raises serious questions once again about the Government’s commitment to supporting the self-employed.

    “The move is extremely disappointing and flies in the face of tax simplification.”

    In a written statement to MPs, Treasury minister Robert Jenrick said: “The Government is announcing today that it will not proceed with the abolition of Class 2 National Insurance contributions (NICs) during this parliament.

    “This change was originally intended to simplify the tax system for the self-employed.

    “We delayed the implementation of this policy in November to consider concerns relating to the impact on self-employed individuals with low profits.

    “We have since engaged with interested parties to explore the issue, and further options for addressing any unintended consequences.

    “A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the state pension rise substantially.

    “Having listened to those likely to be affected by this change we have concluded that it would not be right to proceed during this parliament, given the negative impacts it could have on some of the lowest earning in our society.”
  • Labour Party Criticised for Anti-Labour Stance Sep 27, 2018

    The Labour Party’s John McDonnell has been severely criticised by various business agencies for his stance against the independent professionals and the self-employed. The Minister has been criticised for not doing enough to protect the rights of contracting professionals.

    The shadow chancellor of Exchequer has also been criticised by the Institute of Directors (IoD) for failing to recognise the contributions of directors whose skills and efforts have contributed to increased employment and prosperity in the UK. He had also received criticism for his statement made during a speech to the Trades Union Congress (TUC) that he would ban all umbrella organisations.

    Business agencies that have vehemently criticised the stance of the Labour Party MP against the UK Labour include employment status experts Qdos, the trade group Freelancer and Contractor Services Association (FCSA), and the contractor body Association of Independent Professionals and the Self-Employed (IPSE).

    Spreading Rumours and Untruths
    The shadow chancellor has been an outspoken critic of the gig economy and umbrella companies. While speaking in Liverpool in a conference this Monday, he stated that the Tories had created an age of insecurity. This statement aligns with his statement to the TUC where he had said that freedom does not mean forgoing rights or working multiple jobs does not mean you should lose one.

    Mr. McDonnell also has pledged that his party will end the “profiteering in dividends”. The anti-dividend pledge is in addition to the commitment of the Labour party on taxation matters.

    He has also stated in a speech given to the trade union about two weeks ago that he will clamp down on bogus self-employment and put a ban on umbrella companies and payroll companies.

    According to the chief executive of the FCSA, Mr. McDonnell does not understand the role of umbrella companies. The companies are not ‘genuine brollies’ but rather provide full employment rights.

    Also, the CEO of IPSE, Chris Bryce, had stated that he believes that a brolly ban would be like driving a stake through the heart of flexibility. He had said that equating self-employment with gig-work is a mistake.

    Seb Maley, the former tax inspector at Qdos, also agrees that the Labour party should be careful in assuming that all self-employed workers would want rights similar to regular employees. In contrast, most of them are happy operating outside the IR35 without these rights.

    The contractors and contracting agencies such as umbrella companies should be appreciated and encouraged rather than opposed. They play an important role in contributing to the reduction of unemployment and boosting the economy. In this context, the criticism from the Labour party against them is unfounded and groundless.
  • ICAEW Recommends the Government to Delay IR35 Reform in the Private Sector Sep 26, 2018

    The Institute of Chartered Accountants of England and Wales (ICAEW) has asked the Government to delay extending the controversial IR35 reforms to the private sector.

    The Government had introduced the off-payroll working rules in 2000. In April 2017, reforms were introduced in the public sector that shifted the responsibility of determining employment tax status to the contracting agencies.

    Despite great criticisms about the IR35 reform, the Government had decided to extend the rules to the private sector in 2019.

    However, due to the irregularities regarding the proposed IR35 reforms, the ICAEW has called for the reforms to be postponed until 2020.

    Reasons for Postponement of IR35 Reforms
    The private sector is not ready for the launch of the much complex taxation system, according to ICAEW.

    As per Sarah Ghaffari, the technical tax manager at the chartered accounting body, private businesses in the UK already have a lot on their plates. They are already burdened by the process changes to bring their systems in line with ‘Making Tax Digital’ scheme of HMRC. In addition, they have to deal with the uncertainty surrounding the Brexit impact. In this context, the additional responsibility of determining the IR35 tax status of contractors will lead to further problems.

    Ghaffari had stated that the current problems with the IR35 reform need to be addressed before extending it to the public sector. A ‘holistic’ approach is required to solve the problems relating to reform.

    ICAEW recommends that the taxation of off-payroll working contractors should be the same for private and public sectors. Both need to be taxed in a similar manner. This would remove any confusion for employers regarding the status of work. Also, the Government needs to address the difference in tax and benefits between the different types of work.

    Britain Facing Shortage of Skilled Workers
    A research published last year had revealed that the public sector is losing top talent due to reforms in the IR35 sector. Nearly, 71 percent of public sector projects have been delayed or cancelled due to lack of skilled workers.

    NHS has suffered badly due to the IR35 reform. Nearly 25 percent of departments have lost half of the flexible staff.

    The Government needs to consider the advice of ICAEW and other agencies that have advised against the proposed IR35 extension next year. Extending the reform would have a negative impact on the UK economy resulting in reduced instead of increased tax revenues.
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  • Contractor Wins Pay Out From HMRC Sep 25, 2018

    A contractor has won a case against HMRC, clawing back thousands of pounds in holiday pay.

    Susan Winchester had her employment status changed by Her Majesty’s Revenue and Customs (HMRC) from ‘self-employed’ to ‘worker’, but then did not receive holiday pay she was entitled to.

    Winchester, a marketing and business development consultant, claimed £4,200 in unpaid holiday pay under the Agency Workers Regulations.

    Winchester’s company, SJW Marketing Solutions Ltd, had provided HMRC with marketing services in September 2016.

    With changes to the off-payroll rules in the public sector about to come into force, HMRC ran the engagement through the Check Employment Status for Tax (CEST) tool and determined that IR35 applied.

    IR35 is designed to tackle tax avoidance by establishing whether people who are self-employed should actually be classed as employees for the purposes of paying tax.

    HMRC required Winchester to go onto an agency payroll, a decision that could not be challenged. Winchester claimed that, as she was then effectively an agency worker under the regulations, she was entitled to a clear, transparent amount of holiday pay and to the same holiday entitlement as employees of HMRC.

    The parties agreed to settle the case for the full amount claimed on the morning a tribunal was due to take place.

    Winchester said: “For me, the case was never about money, it was about what’s right and wrong and not being bullied into a position because of a flawed tax law.

    “I’m a very fair person, with a strong moral compass, I would never have taken someone to court without a very good reason. But I just couldn’t understand why somebody could make some arbitrary decision about my tax and employment status on a brief, over-simplified questionnaire that I had no input in and seemingly no right to challenge.”

    The landmark action was funded and backed by the Association of Independent Professionals and the Self-Employed (IPSE), the representative body for the UK’s self-employed community.

    Chris Bryce, IPSE CEO, said: “When HMRC forced Susan onto an agency payroll, with no opportunity to appeal, they thought they could wash their hands clean of any repercussions.

    “Susan’s case sends a very clear message to clients, that if you are going to treat contractors like workers, then you’ve got to give them worker entitlements.

    “You can’t just decide someone is inside IR35, shunt them onto an agency payroll and expect someone further down the line to pick up the tab for your obligations like holiday pay.”

    The case directly challenges controversial 2017 changes to off-payroll rules in the public sector, according to Chris Bryce.

    He said: “This is further proof that the IR35 changes have sown chaos and confusion since they were introduced in the public sector last year. What’s even more extraordinary is that one of the culprits here is HMRC.

    “If HMRC don’t understand their obligations under a system they’ve created, how can they expect businesses to get it right?”

    He added: “With Brexit hanging over the country, IPSE’s response to the government’s consultation on extending the changes to the private sector is clear: abandon this disastrous proposal. We appeal to the government to harness the talent provided by the freelance community and stop hounding them.”

    An HMRC spokesman said the government department “does not discuss identifiable individuals”.

    He added: “In general, in deciding if the off-payroll working rules in the public sector applied, HMRC would consider a number of factors, including how the engagement worked in practice, as well as examining the contract itself. HMRC were committed to ensuring that its approach to the changes as an engager was clear and transparent.”
  • Archbishop Criticised Over Church of England’s Amazon Investment and Zero-Hour Contracts Sep 24, 2018

    The Archbishop of Canterbury has been accused of hypocrisy after it emerged the Church of England invests in Amazon and uses zero-hour contracts, having attacked both.

    In a speech to the TUC Congress in Manchester earlier this week, Justin Welby criticised firms like Amazon for paying “almost nothing” in taxes, and branded the so-called gig economy and zero-hours contracts as “the reincarnation of an ancient evil”.

    However, the Church has now confirmed the online retail giant is one of its 20 biggest investments worldwide and at least two of its cathedrals are advertising zero-hours contract jobs.

    Gloucester Cathedral is currently advertising for a porter on a zero-hours contract, with its website describing the role as mostly evening and weekend work with a wage of up to £8.75 per hour.

    And Norwich Cathedral is looking for a refectory assistant, calling it a “casual zero-hours post” on its website.

    Conservative MP Ben Bradley said: “It’s hypocritical when (he) condemns zero-hours contracts whilst his churches are advertising zero-hours jobs.”

    In a letter to The Times, the Reverend Ray Anglesea, a United Reformed Church minister who worked on a zero-hours contract in a cathedral bookshop, said the archbishop “might have done well to have put his own house in order before addressing the conference”.

    He wrote: “What the Most Rev Justin Welby did not disclose was how many of his cathedrals are zero contract hour employers and how many cathedral employees have no job certainty, no sick or holiday pay, and no maternity cover.”

    Responding, the Church of England said advice to its parishes on zero-hours contracts was issued in 2013, and “does not reflect the current thinking” of the Church.

    “As a responsible employer, the Church of England is now reviewing its working practices,” it added.

    On its investment in Amazon, a spokesman for the church said: “The Church commissioners have previously been on the record that we consider aggressive tax avoidance or abusive tax arrangements to be both a business risk and an ethical issue.

    “As with other issues, we take the view that it is most effective to be in the room with these companies seeking change as a shareholder.
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  • Morrisons Faces £1bn Equal Pay Claims Sep 22, 2018

    Supermarket chain Morrisons is facing equal pay claims worth over £1bn for female shop floor staff who believe they were paid less than men working in distribution centres.

    Law firm Leigh Day said that Morrisons has around 80,000 store staff eligible to claim, which could result in a bill for back pay of over £1bn if the Bradford-based grocer‘s action is found to be unlawful.

    The law firm is already working on claims on behalf of 30,000 workers at Leeds-based Asda, Tesco and Sainsbury’s.

    Emma Satyamurti, a partner at Leigh Day, said: “We believe that Morrisons, as with the other major supermarkets, has underpaid those working in its stores for a number of years.

    “The big four supermarkets in the UK make vast amounts each year in profits – it is time that they faced up to their legal obligations under Equal Pay legislation.

    “Our clients believe that those working on the shop floor should be paid the same as those in the distribution centres, and a failure to commit to this is not only unfair but unlawful.

    “This legal action is being taken forward to ensure that the work done in stores and distribution centres is recognised as being of equal value; not the same work, but work of equal value and that those working on the shop floor should be paid the same as their colleagues in distribution.”

    A spokesperson for Morrisons said: “We are not aware of any court proceedings issued by a third party. We have received a letter asking us a number of questions about our pay policies. Our aim is to pay our colleagues fairly and equally for the job that they do, irrespective of their gender.”

    Leigh Day said it believes employees working in male-dominated distribution centres were paid considerably more than largely female-staffed stores.

    The law firm has lodged claims with the conciliation service ACAS while awaiting a response from Morrisons’ CEO David Potts, who they have written to on behalf of the first group of clients requesting Pay and Gender information for workers.

    Leigh Day has also asked Morrisons to confirm if it has carried out an equal pay audit, something the Equality and Human Rights Commission suggests is the most effective way of ensuring an organisation meets its equal pay obligations.

    The law firm said it has been reported that Morrisons‘ CEO David Potts took home a £1.7m bonus in 2017 – a sum that could take a store employee 100 years to earn.

    The legal action comes a day before Morrisons announces its interim results on Thursday.
  • Conservatives Need to Regain Trust of the Self-Employed Individuals Sep 20, 2018

    The Conservative Government has repeatedly put the message across that it wants to be seen as a champion of small businesses in the UK. And this is important for the prosperity of the country as small businesses contribute billions of dollar to the economy.

    By the year 2020, it is expected that the sector will contribute around £217 billion to the Exchequer. Considering the fact that the sector employs more than 16 million individuals — 60 percent of all private sector employment, the government needs to support this sector.

    Government’s Abhorrent Lack of Support to Small Businesses
    At the moment the Government is doing anything but gaining the trust of the small business sector. The proposed IR35 legislation will likely result in private sector contractors and self-employed individuals paying increased taxes. This will likely result in great financial hardship on the contractors.

    What’s worse, Chancellor Philip Hammond had attempted to increase the NI contributions paid by self-employed individuals. But the Government had backed down after pressure from businesses groups and many Conservative MPs.

    The Government has reduced dividend tax allowance and also announced its intention to scrap Class 2 NI payments that benefited the contractors.

    Instead of supporting the millions of self-employed contractors, the Government is trying to squeeze the maximum amount of money from them. They are viewed as the fabled golden egg laying duck that was killed in the quest to obtain more golden eggs by the owner. If the Government continues to milk the self-employed individuals, it will have to suffer more losses as opposed to increased revenues.

    The private sector contractors are the backbone of the UK economy. Trying to take them down through government legislations will create ruptures in the economic foundation of the country.

    The Conservatives need to introduce reforms to support rather than discourage small businesses. While the Government has taken some positive measures in the past such as establishing a Small Business Commissioner to tackle late payment problems, and also the fact that the small business climate is better in the UK as compared to our European neighbours, the mood as of late seems to have changed.

    The Government needs to ensure that the business environment remains stable in the context of the uncertainty due to Brexit. Extending the IR35 to the public sector will likely add to the chaos in the economy. The Conservatives should consider the rights of hardworking freelancers and self-employed individuals and scrap the off-payroll working rules for the good of the public.