20 February 2008

Brookson’s managing director, Martin Hesketh, was recently invited by Recruiter magazine to explain the ways contractors can work to its readers.

Contractor Options

The far-reaching changes to the MSC legislation last year came about because the Government recognised widespread evasion of employment tax by some temporary workers, operating as though they were self-employed.

There are now three ways a genuinely self-employed contractor can choose to work: on a PAYE basis via their recruitment agency, via an umbrella or employment solution provider, or by running their own business as a limited company or sole trader. The right answer for each contractor will depend upon their individual circumstances and contractors will need a full understanding of each of them.

Working on a PAYE basis via an agency means that the contractor is paid personally by the agency and is taxed on an employed basis. The agency will take care of all commercial and administrative requirements for the individual and provide all relevant insurances required for their assignments.

The Brookson Umbrella Solution

Umbrella or employment solutions, such as the Brookson Umbrella Solution, provide PAYE services for contractors, who are treated as employees of the service provider. Working under the Brookson Umbrella Solution, we will put the necessary insurances, employment contracts and contracts for service in place to enable the contractor to provide their services, requiring minimal input from the contractor or agency. We will also take on all appropriate employer obligations on behalf of the contractor.

In appropriate circumstances, certain tax-deductible business expenses, such as travel, accommodation and food expenses, can be claimed by contractors and other employment benefits are available. Our highly trained customer services team are able to advise contractors on the options available to them.

Helping Contractors Work as a Limited Company

Contractors can also choose to run their own business. This requires a commitment to managing the finances of the business and brings with it the personal responsibility of working compliantly with all relevant legislation. The most commonly used approach is running a limited company.

This tends to appeal to long term contractors, who are confident of their self-employed status, are comfortable with the additional responsibilities and want to access the full benefits of self-employed working. We offer support in the form of accountancy and tax advice to help them fulfill their corporate responsibilities, and run their business efficiently and compliantly.

If you’re not currently a Brookson member but would like some more information about our services, please contact the new business team on 0845 058 1300.

Back to Listing