GLA jubilant as FS Commercial drops challenge to T&S decision
4 March 2013
Public regulatory body the Gangmasters Licensing Authority (GLA) has described the decision by umbrella company FS Commercial (FSC) not to pursue its attempt to overturn the decision not to grant it a licence and operate a travel & subsistence (T&S) scheme as “a significant boost to its ongoing battle”.
Mon, 4 Feb 2013Public regulatory body the Gangmasters Licensing Authority (GLA) has described the decision by umbrella company FS Commercial (FSC) not to pursue its attempt to overturn the decision not to grant it a licence and operate a travel & subsistence (T&S) scheme as “a significant boost to its ongoing battle”.
GLA chief executive officer Paul Broadbent says: “These circumstances should send a strong signal to any other businesses in our sector considering a similar travel and subsistence scheme, or perhaps operating one already, to have a serious and immediate rethink.”
And he went on to warn: “This is not an isolated example. There are more ‘umbrella company’ schemes in our sights like the one FSC proposed. We are already looking into a number of operators.”
Under ‘pay day by pay day’ schemes, employers pay workers T&S expenses in place of their salary every pay day. By applying income tax and National Insurance (NI) contributions relief to the amount of expenses that an employee has incurred, the employers save themselves considerable amounts in NI contributions and tax. And in some cases, these schemes take the worker’s pay below the minimum wage.
FSC had indicated its intention to appeal the ruling, saying it was “surprised and disappointed” that an independent tribunal had backed the GLA’s initial decision, but the deadline to challenge that at a judicial review has now passed.
FSC also noted on its website that it “did not take our decision lightly”, but that “the significant financial implications of proceeding with an appeal in the High Court… [which] may have left us exposed financially” meant it would not seek such a ruling, despite nothing in a statement on its website that a Queen’s Counsel it had consulted with said it was likely it would win the appeal.
GLA chief executive officer Paul Broadbent says: “These circumstances should send a strong signal to any other businesses in our sector considering a similar travel and subsistence scheme, or perhaps operating one already, to have a serious and immediate rethink.”
And he went on to warn: “This is not an isolated example. There are more ‘umbrella company’ schemes in our sights like the one FSC proposed. We are already looking into a number of operators.”
Under ‘pay day by pay day’ schemes, employers pay workers T&S expenses in place of their salary every pay day. By applying income tax and National Insurance (NI) contributions relief to the amount of expenses that an employee has incurred, the employers save themselves considerable amounts in NI contributions and tax. And in some cases, these schemes take the worker’s pay below the minimum wage.
FSC had indicated its intention to appeal the ruling, saying it was “surprised and disappointed” that an independent tribunal had backed the GLA’s initial decision, but the deadline to challenge that at a judicial review has now passed.
FSC also noted on its website that it “did not take our decision lightly”, but that “the significant financial implications of proceeding with an appeal in the High Court… [which] may have left us exposed financially” meant it would not seek such a ruling, despite nothing in a statement on its website that a Queen’s Counsel it had consulted with said it was likely it would win the appeal.
