Trade bodies call for action on proliferation of 'Elective Deduction Models'

by Susie Hughes at 13:31 26/03/14 (News on Business)

Three trade associations have issued a joint request to HM Revenue and Customs to urgently review the use of a new form of model potentially designed to circumnavigate a raft of laws aimed at protecting workers and the business that engage them.

Advertisement The so-called 'Elective Deduction Model (EDM)' is being promoted as a method of classifying workers as self-employed for employment law purposes but employed for tax purposes. Using this combination of status the clear aim is to side step National Minimum Wage (NMW) requirements. Agency Workers Regulations (AWR), Pension auto-enrolment and the planned introduction of onshore intermediaries legislation. Non-Exec Chairman of the Freelancer and Contractor Services Association, Matthew Brown said: "We are incredibly concerned about the use of these models. They afford very little protection to the worker given the avoidance of employment status and create huge risks to the recruitment businesses and end-clients, caught in this scheme. We urge HMRC to review these models as a matter of urgency and to reassure the professional recruitment sector that this clear avoidance tactic will be prevented." Ann Swain, Chief Executive of agency group, APSCo said: "APSCo works hard to raise standards in the recruitment industry and fully supports robust self-regulation in the intermediaries sector. We would oppose the promotion of any model designed specifically to avoid existing or new tax or employment legislation, and APSCo therefore urges HMRC to review this model.” Agency group, REC's, CEO Kevin Green said: "Any model that markets the evasion of NMW and AWR as key selling points has no place in our industry, and any business reliant on such unsustainable models for survival is not the sort we want or need in our sector. These models fundamentally undermine compliant recruitment businesses and we expect HMRC to take swift, decisive action against this and any future models that so profoundly distort the otherwise professional recruitment market." Tweet -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99 2014

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