How will you be communicating with my candidates?
We’ve written a blog aimed at candidates and will be emailing Key Portfolio employees on Monday 7th March to advise them to read it. As always, we’ll be encouraging them to contact us with any queries they have. As a starting point, we’ve anticipated some of the questions they may ask and have answered them in our online Support Centre. If a candidate speaks to you about any of the changes happening in April, please point them in our direction – it’s what we’re here for.
Can you give me some guidance on how to promote Key Portfolio to new candidates?
Of course. We’ll be holding training webinars in March on this very topic. Keep an eye on your inbox for an invitation. In the meantime, please feel free to get in touch if you’d like to chat it through.
Oh, and our Consultant Toolkit is packed with great resources for introducing candidates to Key Portfolio. It will be fully updated shortly, ready for the new tax year.
Will you be updating your marketing materials?
Yes. Our Consultant Toolkit will be fully updated in time for these service changes launching, to allow a seamless transition into the new tax year. A revised version of our animated video will be available soon and if you currently give our postcards out to your candidates, we’ll be sending you a new supply. Drop us an email to make sure you’re on the distribution list.
What can you tell me about the perks and discounts package?
In April, we’re launching a package of perks and discounts for candidates to use at work and home. It includes exceptional savings on shopping, restaurants, travel, days out and lots more. For example, they’ll save money every time they spend at Tesco, Sainsbury’s, Morrisons, Apple, Debenhams, Paperchase, Halfords, ASOS, Marks and Spencer, Boots, Waterstones, Groupon, Trainline, Topshop, Topman, Ticketmaster and Starbucks… to name just a few! It’s all designed to help their pay stretch a little bit further.
Does this mean that any expenses I pay on top of my candidates’ rate are taxable?
Yes. The vast majority of expenses that we process for your candidates after 6th April 2016 will be taxable. This means that almost all expenses you pay in addition to their usual rate, for example a travel allowance, are taxable.
How will the new expenses legislation affect my candidates’ take-home pay?
It will vary. There are several changes happening at the start of the tax year, each with the potential to either increase or decrease take-home pay. These factors will balance out differently for each person.
Those who don’t claim any expenses are likely to see an increase to their take-home pay come April. At the other end of the scale, very high claimers may see a noticeable decrease. Most people are somewhere in the middle.
It’s worth keeping in mind that we stopped daily ‘scale rate’ subsistence expenses two years ago, deciding instead on a fully-receipted, claim-what-you-spend approach. One advantage is that many of our employees have lower weekly claims than they may have had previously, which lessens the impact on them somewhat.
What is the new legislation that prevents expense claims?
The Government are implementing two changes to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). The first, section 289, was enacted as part of Finance Act 2015. It imposes the rule that the employee’s gross salary cannot be varied according to the value of specified expenses. The specified expenses are those included within Chapter 2 and Chapter 5 of Part 5, ITEPA. In effect, this removes Umbrella employees’ entitlement to claim tax relief on the vast majority of the business expenses they currently enjoy as tax allowable, other than by direct application to HMRC via a Self-assessment Tax Return.
The second amendment is proposed section 339A ITEPA and forms part of Finance Bill 2016. As this will not be introduced to parliament until Budget Day on 16th March 2016 it remains subject to amendment. With respect to Umbrella employees, s.339A imposes a new test. If someone is caught by the new test, a further restriction is enforced for travel and subsistence expenses. Umbrella employees who are subject to the right of supervision, direction or control of any party within the temporary supply chain will be obliged to treat each engagement as a separate employment. Each assignment will therefore have to have a permanent workplace and therefore travel and subsistence expenses incurred between their home and the permanent workplace will not be tax allowable.
And there’s more. We’ve answered candidates’ questions over on Key Portfolio…