The FCSA has submitted its recommendations to the Government ahead of the March Budget – with a request for increased government resources to protect contingent workers from being exploited by non-compliant companies high on the agenda.
In a submission sent to the HM Treasury earlier this month, the FCSA, whose members represent over 170,000 UK contractors, outlined its top three priorities to support the temporary workforce sector:
- To implement a temporary furlough scheme that would remove the financial burden that the National Insurance (NI) and pension contributions impose on umbrella employers under the current scheme.
- To make changes to Statutory Sick Pay (SSP) by excluding the requirement for employers who “had fewer than 250 employees on 28 February 2020 across all your PAYE payroll schemes” for the repayment eligibility criteria.
- To extended resources to protect the freelancer and contractor workforce from being exploited by non-compliant payroll services providers and tax avoidance schemes.
FCSA Chief Executive, Phil Pluck said: “Removing the financial NI and pension cost burdens within the current scheme would allow our members to support employees that qualify for furlough during this difficult time.
“While this would still impose a cost on our member companies, it would allow them to continue to support employees, remain financially viable, and be better prepared to support the UK economy as it emerges out of the pandemic.”
“With regards to calling on the expansion of the scope of the SSP rebate to support employers with over 250 employees on their PAYE payrolls, this is because umbrellas typically employee more than 250 people.
“This has resulted in umbrella companies having to cover significant SSP costs, especially where those umbrella employees were shielding for long periods of time.
“We feel that the Government should have excluded this requirement from the SSP repayment eligibility criteria to relieve financial pressure from larger businesses, enabling them to support their employees during these financially difficult and uncertain times.”
“However, one of our biggest concerns is the risk posed by an increase in non-compliant companies entering our sector who are knowingly or unknowingly exploiting the contractor workforce and denying HM Government of essential tax revenue.
“The FCSA represents 65 established professional employment service providers who collectively employ more than 170,000 contingent workers on a fully compliant basis.
“Whilst current legislation and proposed future regulation in our sector serve to identify and expose criminal activity, we still remain very concerned. Current resources available are simply not adequate to enforce or deter such criminal behaviour and this needs to be addressed as a matter of urgency and we continue to offer the Government counsel on this matter.”
“Whilst this Budget will undoubtedly focus on the coronavirus pandemic response, we very much hope that the Chancellor recognises the vital role that the contingent workforce sector has in the UK economy by taking swift and decisive action to remedy the existing schemes to make them fit for purpose and looking beyond lockdown and the pandemic by providing adequate business support,” Phil concluded.