It nice to see the some attention is going to be given to tackling Tax Evasion and it might even involve Social Workers who are Agency Workers who increase take home pay by paying themselves a minimum wage and then paying far less tax on the rest of the money they make. As Income tax revenue directly contributes to the provision of Public service it is a long time coming that deliberate tax avoidance like this might get legislated against, the sooner the better for Public services is waht I have to say.
"Like the benefit cheat, their actions take resources from those who need them most."
He added: "Tax avoidance and evasion are unacceptable in the best of times but in today's circumstances it is morally indefensible."
Chief Treasury secretary Danny Alexander tells delegates at the Lib Dem conference that the government will be ruthless with people who think paying tax is an 'optional extra'http://www.guardian.co.uk/politics/2010/sep/19/lib-dem-nick-clegg-tax Hopefully once better Agency worker rights are implemented in the UK and Agency Workers get the same rights and working conditions as 'Permanent' staff, which I understand will be after working full-time for 12 or more weeks. This will mean that the short-term profitable casual work culture badly affecting the quality of social work intervention will be killed off once and for all. The use of Agency workers also subverts and nullifies equality and diversity duties.
Lets hope this gets properly pursued. When will we get a DM headline: "War on tax cheats"?
Have to be aware that this is as likely to be a populist sound bite as anything that will make any difference.
Tax evasion is illegal and it might be argued that these particular criminals are not pursued with the same moral panic and dedication that "Benefit cheats" are. However we would expect people to claim whatever benefits they were entitled to. It is not surprising that people try to avoid as much tax as possible. Employing specialist tax advisers is of course not an option open to most of us.
I do not believe that a gov't that is essentially happy to see the banking world back to normal - not sharing in the pain as far as I can see - is going to do very much to change the situation. They are clearly not going in for heavy progressive taxation. There will be a little tightening up I expect but not enough to make a real difference. They will be scared that people and corporations will head off to more ameniable climes. As our manufacturing base is all but destroyed all our eggs are in the financial services basket.
I cannot recall where I read it but when the controls on exporting capital were reduced not long after Margaret Thatcher got in, the amount they were trying to save in ministerial budgets over 2 years left the country in a matter of months.
I may be wrong but I suspect that all this stuff about tax avoiders is just lip service.
I am an agency worker who is doing the above through my own LTD company and believe that I am working independently and am thoroughly professional when dealing with service users, I work to deadlines and see my role as an "agency" worker as important as any other worker who is "permanent". I get no holiday or sickness pay, and have never "signed" on. So what if I take this route, my work is good and I have not had a sick day in over a year.
I choose to be an "agency" worker because I can complete short term work contracts, yes the pay is better, but I know lots of permanent staff who are off on sick leave (long term) who are on full pay etc, this is also affecting social work as a whole and can be more costly to the local authority. Stop this negativity of "agency workers" who incidentally dont affect "equality and diversity issues"
Quick Reply
The tenor of “PatHew”’s piece is true, with regard to tax evasion/avoidance; the dig at Agency staff is, to my mind, out of order. They fulfil a valuable service, it is a unjust to pillory them for what are personnel management failings within the employer organisations.
At the moment, the likes of “stevienicks76” are helping permanent staff/contracted workers to manage the unjustifiably high caseload levels and backlog of work in some areas. In an ideal world, a world where working practices are effectively managed, employee stress is monitored, remediated and mitigated, they would, hopefully, not be needed. Unfortunately, caseloads levels are woefully high in many sectors, effective workforce management is sorely lacking, the mitigation of stress is non-existent. It might rankle with some practitioners but, until organisations get a grip of the working situations within social work departments, the need for Agency staff will remain.
It is unjust to intonate that the rates of pay for Agency are excessively profitable. The hourly rates might appear high; however, as noted by “stevienicks76”, Agency staff must build a financial reserve to cover sickness, holidays and retirement (pension) provision. When this is taken into account the per-capita rate of full-time staff and the payments made to agency staff are generally equitable. If you doubt this, speak with a friendly HR person, from your LA, to expose the per-capita rates for each SWP grade, you’ll wonder why the rate is about 25% higher than your annual salary. The answer is – The Hidden Costs of your time off work and your eventual retirement. Cut the Agency workers some slack, they earn what LAs are willing to pay, not what they feel they can extort from hardpressed organisation.
Back to the tax issue, “PatHew” makes a very valid comment about the morality of paying minimum wage (for tax purposes) and allowances/benefits to top up an Agency workers wage; “stevienicks76” appears to “cough” to this. True it is not unlawful, it is certainly more lawful than many MPs’ Parliamentary Allowances claims; however, it is equally as “morally questionable” as moat cleaning, paying the Au-pair as your “2nd home cleaner”, when she lives in the primary home???
We are a profession which is supposed to espouse a strong ethical code. Ethics are inextricably linked to our moral code. I would question the centring of one’s “moral compass”, when arguing that it’s OK to limit tax liability just because it is not unlawful!
Furthermore, some SWPs should ask themselves why they are taking long-terms sick leave. Is it justified, or are they just not cut-out for the role in which they are working? please don't get me wrong, I am confident that many, if not most, are necessarily off-work; however, those who do not feel able to return or cope with their role should "come clean" and step-down. By accepting this and lloking for employment in a less stressed, better suited, more manageble area, they will free-up employers to engage practitioners better able to cope with the stresses.
Apologies, this sounds like me preaching. I’m sorry. I am certainly not professing to be whiter-than-white, with regard to tax avoidance or fraud; however, I would not profess that any tax avoidance/evasion, lawful or not, was a morally sound course of action.
I agree with Stevenicks76, I understand the bigger picture of the Agency/ ISW v's LA social workers debate. Let me be clear, if I had any choice I would work for a LA that supports me with the caseloads, training, good supervsion and so on, however I just aint found one yet. Instead I am choosing to get my Student Loan/ Mortgage/ funeral paid for before this job just about kills me off once and for all. What is done by LTD Company's are perfectly legal as many people have an accountant to help them with these complicated issues. TAX is still paid as a corporate tax and dont tell me that other Organistations in whatever buisness does not use an accountant effectively. When are people going to wake up and consider that social work is a buisness, it shouldnt be but it is. Every day , hour in and hour out senior managers have to balance the LA's books and say "no" to assessments of need, so why cant the ISW/ Agency Social Worker also make that choice. I need to get out this job, I need a life, I need to pay off my debts, I need to sort out my caring responsibilities that overwhelme me. Working as an Agency Social worker/ ISW is stressful, your only as good as your last assessment.Let me be clear also there are many social workers working for LA who do a sterling job without question but there are those that would not last five minutes having to stand on their own merits/ assessment work. Im trying to avoid social work by getting rid of debts to then do something useful, and that I can defend. x amount of years and counting....
Crispycakes
stevienicks76: I am an agency worker who is doing the above through my own LTD company and believe that I am working independently and am thoroughly professional when dealing with service users, I work to deadlines and see my role as an "agency" worker as important as any other worker who is "permanent". I get no holiday or sickness pay, and have never "signed" on. So what if I take this route, my work is good and I have not had a sick day in over a year. I choose to be an "agency" worker because I can complete short term work contracts, yes the pay is better, but I know lots of permanent staff who are off on sick leave (long term) who are on full pay etc, this is also affecting social work as a whole and can be more costly to the local authority. Stop this negativity of "agency workers" who incidentally dont affect "equality and diversity issues"
The tenor is about Tax avoidance and not the apparent quality of the work of someone who works as an Agency Worker. Why do you choose to work through a Ltd company? Agency workers can also work on a PAYE basis and secure all the sick pay and holiday benefits PAYE status accrues. The Ltd status is pure and simple a vehicle for Tax avoidance. Are you suggesting Agency workers do not get sick.
In terms of Diversity and Equality I mostly meant in relation to, but not exclusively, placement/recruitment practice. Unlike 'Permanent' staff it is quite rare to come across Agency workers who have carer responsibilities, this is because unlike Permanent staff they can ask an employer for flexi or part time working. Most Agency workers seem to be single (not an issue in it's self) just that unlike Permanent staff few Agency workers have work arrangement reorganised to take account of Maternity and Paternity issues. Placement of Agency workers are often interviewed just on the basis of a well crafted CV and do not go through the same level of rigorous interview process. The selection process of Agency workers is not based upon meeting a Person spec, but master Vendors just choose a strictly numerically limited number of CV's to be put forward for interview. When the interview finally takes place the interview record are often destroyed immediately and not kept for 6 months, with is the standard for Permanent staff.
Recruiting mangers can subvert the engagement of Agency workers by canvassing those they have worked with before, they can also recruit based upon personal bias, which is facilitated by weak interview processes, records not be kept or be deliberately destroyed. Engagement of an Agency worker can be based upon the one that will be the cheapest and not based upon merit, supply and demand issues may be the deciding factor on which Agency worker to engage rather than competency.
Above are some of the issues that I consider can and do systemically subvert equality and diversity duties. For instance you mention having a grievance about Permanent staff being diagnosed by a Doctor as being unfit for work, this sort of attitude does not chime well with equality duties with regards people who are ill. If you were a recruitment manager would you refuse to interview someone who had a history of being off due to sickness, disability or because they have carer responsibilities are they may ask for flexi time or be perceived as requiring occassional time-off for unpredictable carer events. Unlike the recruitment of Permanent staff there are less checks and balances to ensure Agency worker placements are based upon non discriminatory reasons.
Feel free to blame your Permanent colleagues for the state of social care, with some local authorities having 20/30/40% staff vacancies.
I did seek to mediate my opinions by suggesting that the use of Agency workers should be curbed by enforcing them to have the same rights and conditions as Permanent staff after 12 weeks being on placement, which should become law quite soon, which means you will then just have the same PAYE salary as colleagues and become a Permanent member of staff. I consider this can only be ethical if Agency social workers are also selected, interviewed and placed on the same basis are prospective Permanent staff. Alternatively local authorities should only offer Agency workers placements if they agree to go through an Agency to Permanent worker process after 12 weeks.
I do not bemoan anyones contributions, but I do by definition consider that the use of Agency workers is ipso facto an outright subversion of equalities and diversity, at least that is what the empirical evidence suggests.
You mention never having to sign-on, as if that is somehow that makes you morally superior. I do hope you have good health insurance and never become unwell enough to work or have an accident and therefore won't be able to sell you Labour to the highest bidder. Maybe you take home more than 10K per year more than the average social worker, which is about the equivalent of three years JSA.
stevienicks76: I have not had a sick day in over a year. I choose to be an "agency" worker because I can complete short term work contracts, yes the pay is better, but I know lots of permanent staff who are off on sick leave (long term) who are on full pay etc, this is also affecting social work as a whole and can be more costly to the local authority. Quick Reply
I have not had a sick day in over a year.
I choose to be an "agency" worker because I can complete short term work contracts, yes the pay is better, but I know lots of permanent staff who are off on sick leave (long term) who are on full pay etc, this is also affecting social work as a whole and can be more costly to the local authority.
I have worked with some wonderful agency workers - don't have an issue personally - but I do take exception at this part. For the first time ever, this year, I had to take time off sick (a couple of months) as I needed an operation. It came quite suddenly and I felt enormously guilty about it and the additional work it placed on my colleagues. This implication is that people who are on long-term sick leave on full pay, are actually CHOOSING to be sick and oh, how awful this is for social work as a whole.
Believe me, I wouldn't wish on anyone to have been through what I had to and to have dealt with the physical pain levels both before and after the surgery. I probably returned to work sooner than I should have, for the record and I hate the implication that this might have been interpreted as being somehow something that I was responsible for.
Trust me, before the last year, I also had an absolutely spotless sickness record which I shouldn't need to justify - or not.
Absolutely, I work so hard and have a caseload that is hitting 40, I don't know when I will have to leave my current job as it is only temp work, I could actually be unemployed for some time and have to make allowances for that. Its funny that when I finished my MA in Social Work I couldn't claim JSA as I looked for work because I "hadn't been in full time employment for at least a year". Crispycakes you are so right you are as good as your last assessment! I am proud of our profession and work hard to serve the people we are helping, hence service users (as we all do).
Sorry to hear about the above, I did not mean to offend you!!! Many SW I know are on S/L because of stress, which is quite upsetting as they too are hardworking and exp SW who are finding our profession quite unmanageable etc.
Amen to that Pat, you have neatly enscapsulated all the negatives of agency workers and the suggestion that all agency workers sould ave to consider a move to permanent is a superb one.
I would like to respond to the above PatHew - With regards to the PAYE system that yes I have worked through, I do not as an "agency worker" get sick pay or training for that matter. Holiday allocation is allowed, however as others have quite rightly pointed out I don't get a pension, training or other perks that permanent staff get. I would also loke to point out that I have over 10 years in social care and feel that my CV is not "well crafted" but "speaks for its-self", we are still interviewed and have to prove that we can "hit the ground running", these skills mean that we have to update ourselves, regarding recent research etc, this shows a degree of professionalism that is fundamental to our profession. On a different matter I do not have a "grievance" about perm staff being on sick leave at all, there have been times when I have felt unwell, and have took TOIL, if I got paid sick leave then yes I would have took it!
I am not morally superior, but have worked hard over the years and am dedicated to my profession, I am proud of the fact that I left school with no GCSE's and have completed a degree and MA, I am not acting illegally in what I and other SW are doing by being a LTD company, I ask for nothing and have get on with my job, I am married and yes have no kids but you can't discriminate against me for that, I am simply doing a job I enjoy and getting paid accordingly!
Training: Employers have a statutory duty to provide trainingPensions: For private pensions Tax relief can be given and the government can contribute an extra 20%Sickness absence: Haringey Council Social Workers, had an average of 3.4 days off sick*
The majority of people in Public services who have shortfalls in Pension contributions are women, often due to carer responsibilities.
The lifestyle choices of Agency workers (full time work) is just not sustainable for a large number of Social Workers, as a predominantly female profession, those who want to have children would be better served fro themselves and their children by not being Agency workers. People with enduring health problems, disabilities or carer responsibilities can find often manage being Permanent by flexible work practices, job shares and part time working. Agency work arrangement exclude many groups of workers.Should Permanent posts be advertised and an Agency worker wants to pursue one, they can be said to be at an unfair advantage as they have gainsed entry to the workplace through a less restrictive mechanism.Despite what I have said, I do actually think it can be far cheaper for employers to use Agency workers, they can be quickly disposed of without any need for explanation. They are more likely to want to protect their income rather than making formal complaints about working conditions or whistle blowing about unethical practice. The employer does not have to provide paid Maternity or Paternity leave, which is being raised to full pay for six months quite soon. No consideration has to be given for redundancy. No PQ training or day-release training has to be provided for. No Pension has to be provided for. No legal duty exists which requires consideration be given to requests to work part time/flexi etc. Should an Agency worker have an accident, contract an illness, say cancer which affects one third of adults, then they just leave and get replaced without any need for pastoral care or redeployment to another post. etc etcAs said my main concern still is about Tax avoidance and equalities and diversity principles, which I suggest could somewhat be resolved by forcing all Agency workers to undertaking placements on a strict Temp to Perm basis after 12 weeks and on the proviso they are interviewed like Permanent staff and all interview records are kept and shortlisting is based upon a written Person Spec and Job Description and no artificial limit is placed upon how many applicants can be considered.
Against the backdrop of an economic crisis I would expect employers to give all Agency workers the chance to apply for a Permanent post that is openly advertised and that their contract will be terminated once the Permanent staff recruitment period is concluded, say giving three months informal notice. Or say they can stay on only via a short term contract if there is not enough applicants for the permanents posts. In short constructively get rid of Agency workers and only use them in exceptional circumstances or ensure they are only engaged for a maximum of 12 weeks, or on a direct contract thereafter or Permanently after an open recruitment process.
We all have personal histories of struggles to become Social Workers, but that does not give us any special entitlement above any beyond the terms and conditions of Permanent staff, who I have found by definition much more representative of the diverse pool of Social Workers. compared to Agency workers who through life style choice and personal circumstance can work in a way that gives them more money now, especially when retirement looks like it won't must exist in the future.
When Agency workers get *sick* medically or of the current placement they are doing they may take TOIL, or they also seem to in the large part just leave and take a break or extended holiday, lot of Permanent staff just literally can't afford those choices.
In the past few Prisons existed, then crime and punishment took hold and more and more people got imprisoned, new crimes created and whole new professions of Probation Workers, Prison Officers and others got created. In Social Work a similar process exists, the working conditions are untenable for many, the likes of more child care orders are being taken out, it gets more forms, tick boxes and performance indicators, less and less time is spent face-to-face with services, the media bashes it's failures, new initiatives never stop - in short it is in a permanent state of crisis and low and behold who comes to the rescue but a new breed of professional called the Agency Worker who does not seem to realise that they actually feed off the decaying carcase called Social Work, harsh I know but it is essentially are survival of the fittest at the expense of the vulnerable.
*http://www.communitycare.co.uk/Articles/2009/09/18/112617/haringey-has-lowest-social-worker-sickness-rate.htm
I don't think the 12 week rule is a sound or ethical argument to this as the people who will not have consistency are the service users, I have been in post as an agency worker now for 12 months and have a good professional relationship with the SU, its really not fair to say "get rid of agency staff", we are equally important as perm staff.
Locum social workers who choose to work for their own limited company and pay themselves a minimum wage to avoid income tax are technically on very shaky ground as far as HMRC is concerned. There is a rule called IR35 which was brought in by the last government to curb tax avoidance - particularly from IT contractors. If you are working for one employer it is unlikely that you will pass the IR35 test and you may be liable to income tax on all your income. If you earn £40000 a year as a contractor or locum then you will pay yourselves £6500 a year which no tax will be payable on and then you claim any travel expenses to and from work - say £3000 per annum for example, This means that you will then pay corporation tax on profit AT 21% - I.E, 21% of £30500 or approximately £6200. If you were PAYE then you would pay around £11000 in tax which represents quite a big difference but if you are investigated you will be liable to this tax bill although this is unlikely because of the sheer volume of people doing this.
However you don't get holiday pay, sickness or any pension contributions which I estimate to be worth around 20-25% of pay or around £9000 (LA pension contributions are around 15% of pay).
If a locum earned £20 per hour for a 35 hour week that would equate to around £35000 per year less £3000 for holidays and sick pay or £32000 per year. Take off the pension and that's another £4000 a year which leaves £28000 per year. Add in no job security and no ill health benefits and the attractiveness of being a locum with a limited company is even less attractive even if you are potentially illegally ignoring IR35 rules.
One big advantage which many people seem to miss is the flat rate VAT scheme which means that you can charge VAT at 17.5% on invoices and only pay 8.5% to HMRC if you are a limited company.
I am not a locum and work for the LA on a fixed term PAYE contract but have a lot of sympathy with locums who don't "rake it in" as some people think they do. Also don't forget the hours spent on accounts and having to pay accountants.
Reserve your ire for those who truly evade or avoid tax and don't target colleagues who for whatever reason have decided that they prefer a more flexible yet risky approach to work.
Rules are in a link here http://www.contractorcalculator.co.uk/how_determine_your_contract_passes_ir35.aspx
I personally think that the rules are quite harsh as you will not benefit from many advantages that PAYE employees receive.
Julian: I personally think that the rules are quite harsh as you will not benefit from many advantages that PAYE employees receive.
Tax avoidance is Tax avoidance and yes I agree that the extra money gleaned by being a Ltd may not be much and this is why I suggest the enforcement of a Temp to Perm system after 12 weeks.
As I have mentioned already Agency workers can choose to work on a PAYE or Ltd basis and the £20 per hour is the lowest end of the scale, the average is between £24 to £30+ per hour as shown at: http://www.communitycare.co.uk/jobs/default2.aspx and doing the math will show a take home pay that is quite generous.
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told her thefiasco over pay and she chucked and said "they talk out of theirass, their paying me £50per hour full-time as a locum manager...they have the money for that".
"http://www.communitycare.co.uk/carespace/forums/a-certain-london-borough-giving-notice-to-locums-8176.aspx
There is also a job advertised for adult services at £400-£450 per day equaling that £50 per hour. Its mental money! But acting as a Ltd company when working independently makes good business sense, just not sure I agree with it all. Perhaps thats because I am yet to qualify and am inexperienced. Maybe one day I might see the benefits.
If working as a social worker can accrue 30 to 50 pound notes per hour, I suggest that this will only be achievable by becoming an apologist by keeping one's brown nosing clean at all times and never complaining above the usual digestive grumbles and most definetely never considering whistle-blowing. And if moving into a management position ensuring the suppression of any dissent that may upset one's duck down nest. True commissars need rewards to help them ease out any impressions of self-delusion.
When I give my heart is will be for X per hour.
stevienicks76: I don't think the 12 week rule is a sound or ethical argument to this as the people who will not have consistency are the service users, I have been in post as an agency worker now for 12 months and have a good professional relationship with the SU, its really not fair to say "get rid of agency staff", we are equally important as perm staff.
Your mis-representation of the argument may have a monetary value attachment, I am putting forward that one you had done 12 weeks as an Agency worker the default would be that you would have to become a Permanent member of staff and get the 'perks' they apparently have, or you could choose to leave through your own choice.
stevienicks76: I am an agency worker who is doing the above through my own LTD company and believe that I am working independently and am thoroughly professional when dealing with service users, I work to deadlines and see my role as an "agency" worker as important as any other worker who is "permanent". I get no holiday or sickness pay, and have never "signed" on. So what if I take this route, my work is good and I have not had a sick day in over a year. I choose to be an "agency" worker because I can complete short term work contracts, yes the pay is better, but I know lots of permanent staff who are off on sick leave (long term) who are on full pay etc, this is also affecting social work as a whole and can be more costly to the local authority. Stop this negativity of "agency workers" who incidentally dont affect "equality and diversity issues" Quick Reply
Agency Worker DirectiveThe main purpose of the Agency Worker Directive (AWD) is to ensure the appropriate protection of temporary agency workers through the application of the principle of equal treatment and to address unnecessary restrictions and prohibitions on the use of agency work. The AWD follows similar directives on fixed-term and part-time work (which were based on European social partner agreements). Under the Directive 'equal treatment' relates only to basic working and employment conditions of temporary agency workers (eg pay, working time). The Directive does not affect the employment status of temporary workers.The Directive allows the UK to implement the agreeement reached on the 20 May 2008 between the CBI and the TUC, which means that after 12 weeks in a given job, an agency worker will be entitled to equal treatement (at least the basic working and employment conditions that would apply to the worker concerned if s/he had been recruited directly by that undertaking to occupy the same job).http://www.bis.gov.uk/policies/employment-matters/strategies/awd++++++++++++This will hopefully mean that Agency worker 'perks'are sqeezed out and how it pays to become a Permanent member of staff as it attracts a number of rewards and can be seen as a much better and ethical choice for workers and the Public they seek to serve, see:The Agency Workers Regulations 2010Section 6 (3) lists all the Payments and Rewards Agency workers will be excluded from getting:(3) Those payments or rewards are—(a)any payment by way of occupational sick pay;(b)any payment by way of a pension, allowance or gratuity in connection with the worker’s retirement or as compensation for loss of office;(c)any payment in respect of maternity, paternity or adoption leave;(d)any payment referable to the worker’s redundancy;(e)any payment or reward made pursuant to a financial participation scheme;(f)any bonus, incentive payment or reward which is not directly attributable to the amount or quality of the work done by a worker, and which is given to a worker for a reason other than the amount or quality of work done such as to encourage the worker’s loyalty or to reward the worker’s long-term service;(g)any payment for time off under Part 6 of the 1996 Act or section 169 of the Trade Union and Labour Relations (Consolidation) Act 1992(1) (payment for time off for carrying out trade union duties etc);(h)a guarantee payment under section 28 of the 1996 Act;(i)any payment by way of an advance under an agreement for a loan or by way of an advance of pay (but without prejudice to the application of section 13 of the 1996 Act to any deduction made from the worker’s wages in respect of any such advance);(j)any payment in respect of expenses incurred by the worker in carrying out the employment; and(k)any payment to the worker otherwise than in that person’s capacity as a worker.http://www.legislation.gov.uk/uksi/2010/93/contents/madeOn a related point, when was the last time you came across an Agency social worker who was a Trade Union activist in the workplace?
I don't know of anyone who is on £30-£50 per hour as an agency worker, perhaps this is so in management. As far as I am concerned yes I get my head down and do my job well to represent the authority I am working for. I do not get involved in "organisational politics" and see this as a positive, the enhanced rate I am paid means I will go "over and above" to get my work done appropriately and professionally (As many perm staff do too). Please stop being so negative about agency staff.
Pay up, pay up and play the gameReckless banking and tax avoidance have characteristics in common.Thursday, 23 September 2010http://www.independent.co.uk/opinion/commentators/andreas-whittam-smith/
I'm not sure what the end result of following this line would be.
The impression comes over that Agency Workers are being demonized as immoral, money-grabbing beasts, attempting to snatch the tax revenue from central government who wants nothing more than to dedicate that money to social services department (rather than spending it on another Typhoon fighter bound for Afghanistan).
Worse, their very existence threatens the diversity policies that apply to everyone else., and they impinge upon the ethical codes that their Permanent employment colleagues deeply adhere too.
Agency workers generally move around from contract to contract, and one of the attractions of this work choice is that they don't get embroiled in local office politics. The attraction in using them is that, fearful they won't be extended, they generally simply get on with the work in hand. In the event of a conflict, either with a manager or a colleague, the simple solution is to look for another role and walk away.
Agency workers therefore, are different to Permanent staff. The so-called extra money doesn't invariably go on a Porsche or a time-share in Spain. As many work away from home, some of that 'difference' goes on subsistence - i.e. a bed and breakfast abode. Other funds go to paying for training, required by legislation or otherwise, and some goes to simply putting away for a rainy-day, that is when they are on the 'bench' with no contract, and unable to claim unemployment benefit. There are also some other overheads to be paid-for; notably an accountant (about 600 quid a year) and professional indemnity insurance (300-1000-a-year, depending on cover selected).
How do agency workers 'escape' paying tax? Well, they will pay themselves a genuine salary, which if they are paying their own pension, cannot be too low. They also have to pay enough to ensure they don't come under the minimum wage legislation, and that they pay enough national insurense into their 'pot' to ensure their annual contribution registers. If they have a partner, who perhaps acts as a company secretary, then they will also get a salary (but then can't claim many State benefits).
The remainder sum is invariably paid through a dividend facility. As earned income this is subject to small business rate Corporation Tax at (I think) 21% on the gross dividend amount. Corporation Tax is also payable at a higher rate for any profits that aren't reinvested into the company.
As income received, the sums received in dividends (equally split between partners in the firm) are also subject to Income Tax, at the normal rate for the Tax Band (40% at I think something close to 28k and above) minus the Corporation Tax paid (to prevent double taxation). So the Agency Workers pay the same Income Tax as permanent staff.
One advantage though is that expenses, such as subsistence, if incurred as a result of the contract, such as working some distance from home, can be offset against Corporation Tax liable, though this replaces expenses that some employers make to Permanent staff in some cases. Offsetting training costs is problematic, and the Inland Revenue is sometimes reluctant to allow these claims.
The 'fiddle' if that is what it is to be determined to be, is that the National Insurance element of the money paid in dividends is simply not liable. One argument postulated is that seeing as the Agency worker is paying their own pension, having 'opted-out' of the State pension, can't receive SSP, and will struggle to get Job Seekers Allowance or unemployment benefit, at least for quite a while whilst out-of-work, his or her opportunities to actually gain any of the normal benefits a National Insurance-payer would receive are somewhat limited. This is a moral argument on the grounds that those who pay would normally have access to a minimum of what is being paid-for, when it is for the benefit supposedly of 'everyone'. Agency workers though are not able to claim for those minimum privileges of the welfare state.
However the proposal for Agency workers to move to be impressed into Permanent status is inarguable - other than the obvious flaw that the Agency worker may decline to work in that relationship anymore, and will walk away to the next contract.
With respect to the ethical question - this does run into one fairly regularly discussed problem. Permanent work may not appeal to Agency workers, simply because social work is routinely (in these forum) recognized as being a working environment where bullying-in-the-workplace is endemic;
http://www.communitycare.co.uk/carespace/forums/bullying-in-social-work-8158.aspx#33384
http://www.communitycare.co.uk/carespace/forums/bullying-2313.aspx#8004
http://www.communitycare.co.uk/carespace/forums/bullying-in-the-workplace-8423.aspx#34916
http://www.communitycare.co.uk/carespace/forums/bullying-of-students-whilst-on-placement-3665.aspx#13149
If the proposal is therefore to impress Agency Workers into being Permanent Staff on the grounds of 'ethics' I would posit that such an ethical crusade addresses one of the key reasons why such a proposal wouldn't have much appeal to the said Agency Staff. Perhaps by sorting out the deep moral morass that bullying-in-the-workplace has caused would be a reasonable place to start.
Agency workers can choose to pay all Tax due by working on a PAYE basis, some do though choose to work under the pre-text of a Ltd Co for the purpose of Tax avoidance. Defensive arguments for using a Ltd Co is just rationalisation. (rational lies). The issue is Tax avoidance not the worth or value of the work being undertaken or even the reasons why an individual chooses to work in this way. I would suggest all local authorities and placement providers refuse to engage Agency social care workers who operate on a Ltd Co Tax avoidance basis.
The ethical question about workplace bullying...?
Will this 'morally indefensible' issue that is perhaps more important for those on the ground be addressed with the same vigor?
And as placing huge workloads on individual social workers is also regarded by many as 'morally indefensible' - who will address this issue when it is exasperated by kicking Agency Workers into touch and not all of them decide to convert to Permanent (if indeed they are offered the option or choose to be 'permie' in the bullying environment they've been observing in the office to-date)?
That the problem with moral crusades and panics about certain issues; rub that spot and too many other things come to the foreground. Being selective is fine, but it comes at a price.
This discussion thread is about Tax avoidance.
RachelL: And as placing huge workloads on individual social workers is also regarded by many as 'morally indefensible' - who will address this issue when it is exasperated by kicking Agency Workers into touch and not all of them decide to convert to Permanent (if indeed they are offered the option or choose to be 'permie' in the bullying environment they've been observing in the office to-date)? That the problem with moral crusades and panics about certain issues; rub that spot and too many other things come to the foreground. Being selective is fine, but it comes at a price.
I think you need to get a grip of reality.
I work through a limited company in order to maximise my take home pay. I work hard and there is clearly a need for my services as I am always employed, having done 15 contracts in 7 years.
The terms of the Limited Company Tax position is enshrined in legislation and I do not beleive that my legal entitlements should be cut in order to fund public services.
You can pay more tax if you wish or make a donation to the treasury but this sniping of locums somehow ripping off the state is uncalled for and seems quite bitter. I would have real issues with your Manager if you treated me with such contempt.
I do not get sick benefit or a pension and have to make my own financial provision through insurance and private pensions. I have to pay for my own training and for my own public liability insurance. Lets not forget the accountants and business bank fees. This is my choice and it suits me absolutely fine.
I have no problems whatsoever with claiming my legal entitlements to expenses to run my business as a director of it. Maybe you could lobby for defence cuts, such as Trident etc.
I object strongly to your attitude towards temporary workers and I feel oppressed by you.
Oh I agree. But like many things, an action here has a consequence there;
So, as detailed earlier;
I would suggest all local authorities and placement providers refuse to engage Agency social care workers who operate on a Ltd Co Tax avoidance basis.
Has quite a significant potential consequence. Indeed the consequence is about as bad as can be envisaged, particularly for let's say, child protection.
Oh, you manage to ensure that the dastardly and morally indefensible tax-avoiding (but not 'tax evading' - which is a criminal offense) Agency workers find their work dries up a tad, unless the LA's offer them Permanent roles, or they take Agency roles as PAYE employees only, but what happens if events go the same way it did when CAFCASS staff realised IR35 was about?
How about a percentage, even perhaps a few, decide, stuff it, I'll take a sabbatical, see what happens after a few months, or those who can retire, do so, en masse?
Who takes on the workloads of those Agency staff who have left, or the workloads for which an LA wanted Agency staff in the first place?
What happens of course is that 40+ caseload gets just that little bit bigger. The tension in the office ratchets up a tad more.
Oh yeah. I'm not an Agency worker and never have been.
The current campaign for the pursuit of tax avoidance is very laudable - but it was initially assumed I think by many to be primarily aimed at corporate chiefs who have off-shored their multi-million pound income to the Cayman Islands. In the present environment, with workplace bullying apparently rife in certain areas, and with workloads a major issue everywhere, is it crucial to instigate a policy of castigating certain staff and denying a team an opportunity of filling key position? Would this not be better served by say a rule like an Agency worker cannot be in a role for more than 52 weeks unless converting to Permie if offered, and if they don't take the offer, cannot return for 6 months?
I agree with you Tricky, the constant negativity by fellow professionals is disappointing. I am in the exact same boat as you, I work hard and have 40 plus cases along with reports, safeguarding etc, I have not been off sick in 1 year nor on holiday. So what if we want to work this way folks, get over it!!
tricky: I think you need to get a grip of reality. I work through a limited company in order to maximise my take home pay. I work hard and there is clearly a need for my services as I am always employed, having done 15 contracts in 7 years. The terms of the Limited Company Tax position is enshrined in legislation and I do not beleive that my legal entitlements should be cut in order to fund public services. You can pay more tax if you wish or make a donation to the treasury but this sniping of locums somehow ripping off the state is uncalled for and seems quite bitter. I would have real issues with your Manager if you treated me with such contempt. I do not get sick benefit or a pension and have to make my own financial provision through insurance and private pensions. I have to pay for my own training and for my own public liability insurance. Lets not forget the accountants and business bank fees. This is my choice and it suits me absolutely fine. I have no problems whatsoever with claiming my legal entitlements to expenses to run my business as a director of it. Maybe you could lobby for defence cuts, such as Trident etc. I object strongly to your attitude towards temporary workers and I feel oppressed by you.
Now, I don't want to individually demonise or criticise you, However, bearing in mind one of the most important things for service user is having a positive, stable and consistent working relationship with their social worker, 15 different jobs in 7 years sums up another reason for the problem with agency workers. Thus, PatHews suggestions above seems a great one.
I must admit that I find this discussion is becoming boring for me. It is about Tax avoidance and working as a Limited Company is only undertaken to avoid Tax and increase take home pay. Tax is used to pay for Public services and therefore avoidance directly affects Public services and if such avoidance is undertaken by those working in the Public sector then it is perfectly OK to ask such Public Sector LtdCo Agency Workers, especially Social Workers, to work on a PAYE Agency worker basis only.
I agree. This is boring so....
I am a locum social worker, I always will be and if the tax office or central government change the rules, then I will go along with it. Until then, you can have your moral stance and I will have mine.
If local authorities do not want to employ my services then that is up to them. In the meantime, it would seem that they value what I do.
I think in the years to come that all of the social workers who think that they are in a long term job will have the shock of their lives as the cuts start to take hold and local authorities do not have any money to pay workers on a long term basis.
Best wishes to you all
Supply and demand.
And lets not forget the nice little backhander agency workers get from the vat man when they register for vat. It must really annoy you lot.
I must say that at nearly all the places I have worked, the social workers who are professionally asleep and that you learn the least from are the ones who have been there the longest.
Service users are happy enough with a new face if the outgoing one, again usually a long term worker, has not built up a toxic and claustrophoboc codependancy with that vulnerable person.
Part of the vital skillset of a worker is to be clear about the parameters of their job, particular engagement and exiting, and whilst their is plenty of truth in what you say about some service users not enjoying change, they are not a homogenous group.
I would not work in a role that involved me building a relationship with a service user, such as childrens services, if the employing client is not prepared to give a long contract.
I usually work in services where my role is to sort out backlogs of assessments or work that nobody has time to do and needs to be done (placement reviews, duty, access and intake, crisis intervention).
IR35 tax laws are clear that any worker who takes the place of a permanant worker must pay PAYE as they are deemed to be under "hidden employment" so they are evading tax, which is a criminal offence.
I will adjust my tax position to that of PAYE if my role involves taking over where someone is on sick, training or where there is a vacancy to be filled. Otherwise, I offer a consultancy service to provide the level of skill and expertise that can only be provided by a wide range of experience in different settings.
The tax laws are clear about this and it is not a case of being morally indefensible, it is a case of tax case law.
Lets accept that like the service users, workers have different morals and needs in their lives so live and let live.
Best wishes
Child Benefit is too be scrapped for high earners (£44K+), so I am sure those working under the Ltd Co scam will ensure that they will keep their household earnings below £44k threshold to ensure they can keep Child Benefit. The mechanism used to assess income will be PAYE..........Another advantage of the Ltd Co arrangements would be that those living in a household with more than one wage earner, could easily live on one person's income and it would seem feasible for all of the Agency workers income could be classed as Profit and attract the lowest tax rate, or the Agency worker could put all of their money in a private Pension and the government would then give an extra 20% contribution and that does not even mention all the tax deductions allowed for expenses.
Bored silly with this pointless topic now.
Get over it and accept that as contactors, working within the law and providing a service that is clearly in demand, we have the right to work under Ltd Company arrangements.
I accept that morally people have different stances on this and if the HMRC and VAT offices decree that the tax position is to change, then I will be eligible for sick pay and holiday pay from the employer under the same terms as permanant workers.
I have never heard such a load of sour grapes and am amazed that my fellow professionals believe that by acting lawfully, I am devoid of morals.
Remember again that if a social worker is doing the work of someone who is absent from work then they are described as a "disguised employee" and are therefore not eligible to work outside IR35 and must pay PAYE.
If the contractor provides a service that is wholly outside of the regular work roles, for example piloting a new duty service or doing a time limited piece of work to provide an independent re assessment of placements, then this does not fall within IR35. The contractor must also provide a replacement worker at their own cost if unable to continue with the contract and put the work right at their own cost.
Sounds like there may be people who are working caseloads who are evading tax as they are not actually contractors in legal terms. If so, they face fines and imprisonment for deliberate tax evasion.
For us real bona fide contractors who are working on projects then we are entitled to offset expenses, such as public liability insurance, accountancy fees, travel to offsite places of work and for training/supervison as they are not provided by the client (local authority). If I was paying PAYE then I would get sick pay, holiday pay etc which would all be charged to the local authority anyway.
Cheers
Well said Tricky, I too am in the same boat as you and love undertaking agency work. It is legal so we have nothing to worry about, we pay our taxes!!
There is always going to be a need for agency workers so please once and for all folks GET OVER IT.
Thanks...
What an interesting subject. To be honest, I didn't even know you could work under those arrangements - how ignorant am I.
There are just two things that have popped into my mind after reading particulary tricky's and stevienicks76's comments:
Just because there is a demand for something, doesn't mean it is right. I don't fully understand why these people are given work - I assume it is for the same reasons that agency workers are given work. This means the demand is there because working conditions are bad, there is inequality that makes people sick or that prevents "normal" ie permanent workers from being able to do the job. This means the demand is created by inequality and poor working conditions, and by having temp workers that accept poor working conditions and inequality because their main goal in life is bringing home loadsa money nothing is done about these conditions. This is like claiming there is a demand for Starbucks.
Avoiding paying tax, therefore avoiding paying for public services, leading to cuts in public services and I therefore lose my job .... interesting.
I do think that is devoid of morals, and I would be quite unhappy to have to work with someone like this. And surely it can't be called "social" work any more.
Apologies if I have oversimplified it / understood it wrong; as I said, I have never even heard of this. This is how un-savvy I am financially.