The term AWR refers to the Agency Works Regulations, which were introduced in October 2011.

The purpose of the Regulations is to ensure that the basic working and employment conditions of temporary workers are no less favourable than if they had been recruited directly by the hiring company.

The areas covered include remuneration, paid holiday, working hours and overtime, and following an agreement between the UK Government, the CBI and the TUC will take effect after a temporary worker has been engaged for a 12 week period.

In addition, agency workers will have the right to access certain of the hiring company's collective facilities and amenities with effect from the first day of their assignment, together with the right to be informed about permanent employment opportunities.

BIS Goverment information regarding AWR

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Introduced in April 2016 the purpose of this legislation is to restrict travel and subsistence for individuals traveling to a temporary workplace and working via an employment intermediary.

The legislation brought about two main changes both of which had impact on the flexible labour market.

New S.339A ITEPA 2003

Workplace is a permanent workplace if:
The worker works for end client via an employment intermediary (defined as in the business of supplying labour) (not PSC) and Supervision Direction or Control (or the right of applies)

Or the worker works for an end client via a PSC, that is caught inside the scope of IR35.

Expenses are not exempt if:
The expenses are paid pursuant to salary sacrifice arrangements.

Give up general earnings in return for expenses; or the amount of general earnings depends on the expenses (i.e., salary, expenses and bonus)

For more detailed information:

visit: https://www.gov.uk/government/publications/employment-intermediaries-personal-services-and-supervision-direction-or-control/employment-intermediaries-personal-services-and-supervision-direction-or-control

The term IR35 refers to the HMRC explanation of legislation contained in Schedule 12 of the 2000 Finance Act.

The purpose of IR35 is to remove opportunities for avoidance of Tax and NI contributions by the use of intermediaries, such as service companies or partnerships, in circumstances where an individual worker would otherwise be an employee of the client.

Essentially, IR35 affects all contractors who do not meet HMRC's definition of 'self employed'.

Prior to IR35 the Government had been concerned about the hiring of individuals through their own service companies. It was possible for someone to leave work as an employee on Friday and return the following Monday doing the same job as an indirectly engaged 'consultant' paying reduced Tax and NI contributions.

In practical terms from 6th April 2000 anyone who would otherwise be hired as an employee but who instead provided services via their own service company are deemed to be directly employed. This way they are obliged to pay NI contributions and PAYE in the same manner as if they were directly employed.

HMRC information regarding IR35

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In December 2006 HM Revenue and Customs introduced a documentation entitled "Tackling Managed Service Companies". This document set out a strategy of how it was going to tackle the avoidance of Tax and National Insurance contributions for workers operating through a Managed Service Company.

The 2007 Budget introduced legislation that enforced full Tax and NIC payments on all income received by a Managed Service Company.

HMRC Information regarding the new legislation

Concerned? – Call and speak with one of our advisors on 01942 679997 or click here to contact us through the website.

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