Sponsored: The price of progress?

The new off-payroll IR35 rules kicked in last month, and just over a month on, so has the financial and compliance impact. Could an outsourced PAYE payroll model be the solution? David McCormack, CEO of HMRC-compliant outsourced payroll and employee engagement and benefits specialist HIVE360 investigates.

The facts:

  1. Changes to IR35 legislation took effect on 6 April 2021. 
  2. The rules mean there’s more tax to pay.   
  3. Public and private sector businesses engaging workers through intermediaries must identify if the worker is a direct employee for income tax purposes.  
  4. IR35 applies to the end-user; unless it is a small company, IR35 applies, and the business must apply the rules based on client’s determination of status.  
  5. If a worker falls under IR35, then any claim against the Employment Allowance is disallowed, meaning intermediaries knowingly using the mini umbrella model with a client deemed supply within IR35, the business and client are exposed to tax risk.  
  6. If  the  worker provides services to a public sector, medium or large-sized private sector client, they need an employment status determination and the reasons from the client.

Compliance and choice

Recruitment  businesses  have  three options: 

  1. Set-up an in-house payroll facility, 
  2. Cut workers’ pay, or 
  3. Outsource payroll to a recommended PAYE-compliant specialist.  

Umbrella companies: charge recruiters for administering payroll, at an average £20 per worker per week, i.e. £1,000 per worker a year, based on an £18,000  salary.   
In-house payroll: carries costs. A recruiter with 400 workers should expect an additional £30,000 each year  in  administration and resource costs, which can be ‘absorbed’ or passed on via a worker pay cut. 
Outsourcing PAYE payroll: cost-savings that speak for themselves: 

  • Recruiters outsourcing  temporary workers’ PAYE payroll to HIVE360 save around £100 or more per worker in the first year.   
  • A temp agency with 2,000 PAYE temps could see a return of £200,000 per annum. 
  • An employer with 100 employees could achieve a return of over £10,000. 

Adding value

Candidate retention and attraction rates remain top priorities, and what is setting progressive recruitment businesses apart is an embedded employee/candidate engagement strategy that looks after payroll and people.

Employee retention involves practices that improve or maintain a positive working environment to create a strong workplace culture. Ideally forming part of an employee engagement strategy, it includes onboarding and career progression, reward and recognition policies, training and development, employee benefits, and work:life balance initiatives like flexible working, financial/mental health and wellbeing support. 

Pay, benefits and wellbeing all in hand

HIVE360 is dedicated to empowering businesses to achieve better engagement with their people, to create a happy, loyal and motivated workforce, and to improve employee retention.

As well as a fully HMRC- and GLAA-compliant PAYE outsourced payroll provider, HIVE360 provides wellbeing and benefits via its unique customisable engagement app: Engage

Provided at zero cost and as standard with the HIVE360 outsourced payroll and employment administration solution, Engage’s complete package of employee benefits includes:

  • 24/7, confidential access to mental health support, counsellors and GPs
  • personal doctor, support helpline and care support
  • gym memberships, high-street, lifestyle, dining and insurance discounts, digital payslips
  • real-time workplace pension dashboard to support employees’ financial wellbeing
  • access to an online training platform.

Six reasons to partner with HIVE360 

  1. Fully HMRC- & GLAA-compliant and transparent PAYE payroll support. 
  2. Future-proof solution that meets the demands of IR35 and the Good Work Plan. 
  3. Auto enrolment pension administration with high-performing workplace pension provider. 
  4. Structured to deliver significant cost savings and operational efficiency gains. 
  5. Centred around a mobile platform that enhances candidate wellbeing support and benefits. 
  6. HR legal advisory support included for continued compliance and protection. 

HIVE360 is an expert in recruitment agency PAYE payroll, wellbeing and benefits provision. A GLAA license holder and corporate member of Inspiring Workplaces, championing a new model of employment administration and redefining employment and pension administration processing.  Visit: www.hive360.com.

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