When we visit a prospective customer agency, by far the commonest comment we hear is ‘We let the contractor decide’.  If we look at the contractors motivations for choice of supplier, it usually comes down to money.  The biggest tax free dispensations, the lowest tax, and the smallest cost. Unfortunately there are no bigger tax free dispensations, or lowest tax; we all have to work to the same regulations, and there are no exceptions. So in a level and equally compliant market, we all would pay the contractor the exact same amount.

The only financial difference can be the difference in cost between us and our competition. However, there are usually only a few pounds between us and our competition, and not the many pounds that can be saved by using an offshore company, ignoring minimum wage regulations, or paying tax free expenses that have never been incurred. Unfortunately these are the practises that create the debt of transfer of debt.

Although the contractor’s motivations may be the maximisation of his net income, this may be incompatible with your motivation of protecting your agency.

2.    The Agency

There is no kite mark for our industry, and impartial information is difficult to find. The advice we always give our customers is ‘Umbrella and Sub-contractor Companies are no different to normal companies’ Can you use dispensations to pay expenses tax free that have never been incurred? Can you pay less than £5.80 per hour? By routing wages through a foreign bank, can you pay your workers tax free? If the answer is No, then it’s No for us too.

As such you don’t need expensive advisors to tell you if your supplier is trading legally or not, just a fair level of business acumen. If you have a look at a sample Zeva Umbrella payslip, you can see that a very minimum £5.80 per hour is allowed, before expenses are even considered. We do not have any dispensations, and do not plan to apply for any. Therefore all our expenses are receipted, declared and recorded. By this simple method, tax debt is not incurred to start with.

Your motivation for you choosing Zeva is that we are 100% compliant, and we are protecting our workers and our agencies by ensuring that an ongoing debt of unpaid tax is not incurred in the first place.