Welcome to the fourth episode of our First 100 Days in Office podcast series, where we will delve into the Labour Party’s polices and how these could impact individuals.
In this episode, we explore the impact of potential taxation changes expected in what Sir Keir Starmer has warned will be a ‘painful’ Autumn Budget could have on employee reward and mobility and compliance from an employer’s perspective.
Chairing the latest episode is Ian Goodwin, Employment Tax Partner, and an expert adviser on reward strategies and managing HMRC risks.
Joining Ian is:
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Hi everyone.
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Thanks for joining us
on the fourth episode
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of our First 100 Days
in Office podcast series.
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Here we're going to delve
into some of the new governments policies
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and proposed changes that could impact
sectors, businesses and individuals.
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This episode is going to explore
the potential impact on employers.
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Looking at it from a reward
and ability unemployment tax perspective.
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We're really going to focus on
what the new government is going to do,
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potentially with the upcoming budget
that we're going to see in late October.
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Who am I?
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I'm Ian Goodwin, an Employment
Tax and Reward partner at Forvis Mazars
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and I'm very lucky to be joined
by my colleagues, Robin Bailey,
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a Director of Global Mobility business,
and also Michelle Askew,
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who's a Director and advises
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companies and businesses
and individuals on immigration issues.
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So where should we start today?
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Well, I think the place to start is
what are the proposed changes
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that we're we're aware of
that are going to come
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for employers to think about
and also for those individuals.
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Michelle,
I wondered if you could kick me off
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with a little bit of what you're seeing
from an immigration perspective
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since the government took office.
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Yeah, absolutely.
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So there hasn't been, at this point,
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too much
change from, the previous government.
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A lot of
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the five point plan that was introduced
by the conservatives to reduce
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immigration is being upheld
by, the new, government.
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So they're going to continue
to restrict students bringing dependants,
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continue to restrict, care workers,
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to bring dependants with them
and strengthening, the requirement of care
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providers to register
with the Quality Care Commission.
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They're maintaining the new increased,
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salary thresholds for skilled workers,
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which are now set at £38,700.
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And they're going to keep the removal
of the 20% discount rate,
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so that employers unable to pay sponsored
or migrant workers
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less than UK
workers in key shortage occupation areas.
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One of the things that has
we have seen some movement on is,
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the strengthening of the migration
advisory Committee.
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So Labour wants to work much more closely
with this organisation
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to allow it to inform,
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its immigration
policy much more accurately
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and it's involved
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expects the Migration Advisory
committee to work
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with pre-existing and
new governmental bodies
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such as Skills England,
which was created in July
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and it wants to, to use them
more effectively to help us to help
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join up immigration
skills and labour market policies.
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There's been no real detail on what
this would look like at the moment,
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but one of the things that we have seen
come out of this is that
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the Home Secretary has already instructed
the Migration Advisory
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Committee to take an in-depth look,
at key sectors, I.T.
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and engineering,
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where they have a nine month period
in which to
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to do a really deep dive into that sector
and try and identify,
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where shortages may occur,
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where resuming,
although it's not confirmed that
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there will be a call for evidence
from employers within these sectors.
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rather than just a rapid review,
which is which what we've seen recently.
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So if there are, employees
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within it
and engineering, it's definitely,
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a good idea to get involved
with any call for evidence, see,
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evidence requests that come out from the
Migration Advisory Committee to help shape
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what recruitment looks like in relation
to to those areas moving forward.
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So on that basis, Michelle,
are we likely to see a bit of a
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skilled migration
push in those particular sectors?
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It's difficult to determine.
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Obviously
the intention currently is still to reduce
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migration, net migration into the UK.
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But what is likely to see is
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that there will be some changes
on the immigration salary list.
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So where sectors are identified
as having a skilled shortage
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or not having a skill shortage,
we'll see some movement
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on those occupations
that that qualify as short,
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which in regards to immigration.
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Fantastic.
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And bringing in Robin into this debate,
who's tax is going to play
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a big role here as to whether people
actually want to come across to the UK
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and how they set their tax affairs
and what employers do?
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What are you saying
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from a from a global mobility
perspective here?
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If we send centre this in, in terms
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of the proposals from the Labour
government on the legislation perspective,
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the main
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change has been some
on the foreign income and gains regime.
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So Labour have made
some minor tweaks to that.
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So we may recall that
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earlier on in the spring,
it was announced that there are changes
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to the rules for non domiciled individuals
who can claim the remittance basis.
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So on the foreign income and gains
regime called the Fig,
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the proposals are from the six of April
2025.
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That what happens is those individuals
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are only subject to UK
tax on their foreign income
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and gains for the first four tax years
that they're in the United Kingdom.
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and then for employment income,
that applies for the first three years.
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Now, in the initial proposals
that were put forward
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by the previous conservative government,
there were some concessions
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that were put forward
where, in essence, there was a temporary
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repatriation facility where those people
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in the next year,
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following the year ended,
5th of April 2005, they could bring in
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as much foreign income and gains
and remit that, but only paid 12%.
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Labour consulting on that right
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as to whether that rate will still apply,
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there was also
in the conservative proposals
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where someone ceased to qualify,
so the remittance basis,
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the individual could remit
as much foreign income and gains
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as they wanted,
but incur a 50% tax charge.
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And Labour have taken that away
completely.
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That concession will not apply.
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Okay.
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So those are the main changes
from the foreign income and gains regime
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from an expat perspective.
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Just on that then, Robin.
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So those concessions easing,
what are we take from that is that may
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mean that individuals might not want to
be in the UK quite the same?
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It could be the case, I
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think, in terms of high
net worth individuals in.
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But I think there needs to be
a separation here
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between those asset rich
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private clients,
a high net worth individuals
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and what we see from a global mobility
expatriate perspective,
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because when we deal with people
that come to the UK,
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they're generally people that come on
an assignment for a short term period,
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say one year to three years.
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So when we look at these concessions,
what do you actually might see
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is with the rules being simplified,
which we'll come onto in a moment,
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you may actually see an increase in people
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coming on expatriate assignments,
because under the new rules,
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you can remit as much in theory,
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foreign income and gains as you want
without incurring a tax charge on it,
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because what would happen
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is the individual wouldn't be subject
to those foreign income and gains.
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For the first four years there in the UK,
three years for employment income.
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I think where you're going to see
a decrease in people coming into the UK
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potentially is going to be
for those high net worth investors
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who in the past would have stayed
in the UK for a very long time period.
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They're going to be dis-incentivised
because the actual cap on
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when they're forward
income gains remains outside.
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The UK is only going to be
for up to four years.
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So I think it's important to separate
the two distinct classes of people
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that we're talking about here.
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That's fantastic, Robin.
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And I think, just going back to Michelle
on that with what Robin said around
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more people potentially coming into the UK
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given a simplification, in that respect,
what will businesses really
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need to do to make sure that they’ve
bottomed out their immigration
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requirements when they've got people
coming from overseas into the UK?
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So then there definitely
needs to be some planning.
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you know, they need to understand
who they're moving
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over and they need to ensure
that they're going to meet these higher
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minimum salary requirements
for, the role that they're being
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sponsored for. If we're talking
about the impacts,
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you know, the, the, the attractiveness of,
of maybe an assignment based, move
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what we may
see is a dip in the number of individuals
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using the skilled worker rate
and taking advantage
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of the global business mobility,
which is very much an assignment based,
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a route that that they can use.
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As I said,
the planning is the important part,
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making sure that, you know,
they meet those requirements
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and understanding where those gaps
are going to come in their potentially
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coming, their workforce,
so that they can, ensure
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they've got the people in place
to, to manage any of those.
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That's great.
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I think, I think
centring on another topic area, compliance,
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and when I saw the announcement for the
for the budget for 30th of October,
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the one thing that jumped out to me
was the fact that Labour are going
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to really focus on compliance,
making businesses
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pay the right amount of tax
as accurately as possible.
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the one thing we have kind of seen
there in the information is that
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there might be 5000 more HMRC officers
doing the rounds and doing reviews.
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What's that going
to bring to organisations?
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And that's HMRC and Home Office there,
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Michelle.
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But Robin from from a HMRC perspective,
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what should businesses
be expecting over the next 12 months?
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So even
if I centre this on global mobility
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from an expat perspective,
and then I'll move to you
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from a domestic employment
tax perspective, if that's all right.
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Okay. Right.
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So if we if we look at global mobility,
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I would expect if I was HMRC,
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I would, I would dedicate that resource
to looking at things like short term
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business visits, because that's something
that employers often get wrong.
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So there's a mistake that
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because people come into the UK,
they host employees from entities
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in the same group and the individuals
spend less than one, eight, three days.
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There's often a fallacy,
a myth that that means
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that there's no income tax
and there's nothing to report.
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And often that's not the case.
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That can give rise
to reporting obligations.
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If you host an individual
like that from overseas,
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there's always something to report to HMRC
if there's no tax.
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And I've seen many employees
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when I spoke to them, speak to them,
they're very ignorant of those rules.
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So that's one
area from an expat perspective.
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I think in terms of the transition
of the foreign and incoming gains rules,
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I think a lot of people
will get that wrong.
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And if I was HMRC,
I'd be looking into those claims
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that are made in the 24/25 tax year
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and 25/26 tax year, as well.
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And finally, we're seeing we still
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we still got a lot of remote worker cases.
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And where employers in order
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to mitigate the risks
of permanent establishment
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and create a shield,
what they often did when they were coming
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and having employees in the UK
where they had no permanent establishment,
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what was actually
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happening is often they use something
called employers of record,
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and the employer of records took
on the reporting responsibilities in terms
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of putting together the employment
contract, doing the payroll, reporting,
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and then the employer in turn use
that as a shield against pay.
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Now, if I was HMRC,
I would just look at all
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of those employer records
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companies, target them and inquire
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into the PE status
of the underlying companies involved,
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and also look to see whether PAYE was paid
by the right entity in the first place.
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So that's something that I would be
looking to target if I was HMRC as well.
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That's great, Robin.
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I think from my perspective we're already
seeing quite a lot of activity actually.
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we, we in the UK that a lot of the HMRC
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investigations are centred
at the moment on Ir35, on those
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within the Construction Industry scheme
and also looking at national minimum wage.
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We've seen a rise in those cases
and that's going to be a real focus area.
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I think, over the next 12 to 18 months,
particularly as HMRC
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provides better, better scrutiny,
more scrutiny, I should say, in relation
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to having more inspectors
on the ground and doing reviews.
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And that does seem to be a real keenness
to go to organisations that,
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possibly not had a review for the last
3 to 5 years
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and potentially, you know,
it means that it's their turn, in essence,
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to to have a review look under that bonnet
and see whether they are doing anything
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potentially that isn't quite right from a
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from a tax
and national insurance perspective.
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So anyone who's not had a review
for the last 3 to 5 years
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should probably expect one
over the next 12 to 18 months.
00:14:07:23 - 00:14:11:11
and it'd be a good opportunity
to look at getting your house
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in order prior to that, and making
sure you're doing the right things
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and being proactive from both the tax
and minimum wage perspective, I suppose.
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Just on that,
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Michelle, from, from a home office angle,
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is there anything that that that is
is there any much activity there at all?
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There's
no real activity at the moment, but one of
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the, pledges was to focus on,
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employers and
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looking at their illegal work, you know,
whether they have illegal workers.
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So, you know, there's always been rumours
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of more compliance offices
within the Home Office.
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so I think potentially what we may
see is an increased number of,
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compliance visits
where the Home Office come out to visit
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employers that hold sponsor licenses,
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and to look looking at their H.R processes
and procedures around
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specifically the right to work, checks
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that every business
needs to undertake in the UK.
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but also around to the other key.
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H.R areas around
tracking and monitoring, document
00:15:19:06 - 00:15:23:11
retention, reporting,
and those, those aspects.
00:15:24:01 - 00:15:27:11
so we are expecting to
to see an increased number
00:15:27:11 - 00:15:30:13
of compliance visits,
and we're working with our clients
00:15:30:13 - 00:15:34:15
at the moment to make sure that, you know,
they're prepared for these visits
00:15:34:15 - 00:15:37:16
and that they're looking at their
their existing processes
00:15:37:16 - 00:15:41:12
to make sure that they're going to meet
these compliance requirements.
00:15:43:01 - 00:15:44:19
Thanks
for summarising that that, Michelle.
00:15:44:19 - 00:15:48:08
I think it demonstrates that there's
going to be more scrutiny applied.
00:15:48:08 - 00:15:50:06
I think I've used that word
3 or 4 times now,
00:15:50:06 - 00:15:53:06
but probably going to be a key word
for the next 12 months.
00:15:53:15 - 00:15:56:19
With that,
an additional kind of assessments of of
00:15:56:21 - 00:15:59:21
of organisations and employers in the UK,
00:15:59:21 - 00:16:03:18
this generally means it's
going to be more cost, more time used.
00:16:04:06 - 00:16:07:20
one thing
I'm kind of mindful of for employers
00:16:07:20 - 00:16:12:07
and also individuals
is this kind of debate around
00:16:12:07 - 00:16:15:15
minimum wage, national minimum wage,
what that does with pay differentials
00:16:16:01 - 00:16:19:09
at the minute, we've got a national
minimum wage in the UK of £11.44.
00:16:19:18 - 00:16:23:00
We are expecting a low pay commission
and the government to announce,
00:16:23:14 - 00:16:26:14
a new national minimum wage rate from,
00:16:27:09 - 00:16:32:15
for April 2025, whether that is £11.89,
whether it's £12 an hour,
00:16:32:22 - 00:16:34:18
we could put our bets on that
to see what is.
00:16:34:18 - 00:16:38:23
But it is going to increase
and bring additional cost for employers.
00:16:39:12 - 00:16:40:18
going forward,
00:16:40:18 - 00:16:43:16
we're going to have to think of
pay differentials and things like that.
00:16:43:16 - 00:16:47:16
What what do you think we will see
from a global mobility?
00:16:47:19 - 00:16:50:14
To start with you,
Robin, there, related to minimum wage.
00:16:50:14 - 00:16:51:23
Is there anything we need to consider from
00:16:51:23 - 00:16:54:09
from that perspective people
bring in across want the comment?
00:16:54:09 - 00:16:56:20
And then I'll come to Michelle
on that as well.
00:16:56:20 - 00:16:57:21
Yeah. Yeah.
00:16:57:21 - 00:17:00:03
I mean I mean, what you see often
where this is
00:17:00:03 - 00:17:03:16
an issue is in the construction
industry in as a starting point,
00:17:04:15 - 00:17:06:00
what you'll see is a lot of businesses
00:17:06:00 - 00:17:09:07
on, on larger construction
projects is you'll get employees
00:17:09:19 - 00:17:13:23
from typically Eastern and Central Europe,
and they'll be on low wages
00:17:14:13 - 00:17:17:13
and they'll be paid
things like per diem allowances
00:17:17:13 - 00:17:20:13
and things like that to bump up their pay
00:17:21:15 - 00:17:23:16
and benefits as well.
00:17:23:16 - 00:17:27:03
And often that the wages that are paid in
those jurisdictions can be lower
00:17:27:14 - 00:17:27:23
than what
00:17:27:23 - 00:17:31:10
the national minimum wage standards are,
so that that's something to look out for.
00:17:32:01 - 00:17:35:01
I would say in particular,
00:17:35:14 - 00:17:38:14
Michelle, from an immigration perspective,
is there anything
00:17:39:01 - 00:17:42:15
that sort of ties in the interaction
between kind of pay levels
00:17:42:15 - 00:17:45:15
set from an immigration side
and a minimum wage side?
00:17:46:21 - 00:17:49:02
I mean, unfortunately, the,
00:17:49:02 - 00:17:53:18
salary requirements for, for,
for sponsored workers tend to, to carry
00:17:53:18 - 00:17:58:21
an hourly rate that is over and above,
the national minimum wage level.
00:17:59:04 - 00:18:03:11
What we might see is
if the national minimum wage does go up,
00:18:03:11 - 00:18:08:16
which obviously you've indicated is very,
very likely, we may then see
00:18:08:16 - 00:18:14:15
a further increase in minimum salary
requirements for specific visa routes
00:18:14:15 - 00:18:19:00
or for specific roles, but these were only
just increased in April.
00:18:19:00 - 00:18:24:14
So at the moment, my view is
that they'll probably keep them there
00:18:25:17 - 00:18:28:22
and maybe look at that in the coming
12 to 18 months.
00:18:28:22 - 00:18:32:22
Once those, those minimum wage,
new minimum wage rates have taken effect.
00:18:34:02 - 00:18:34:15
Thank you.
00:18:34:15 - 00:18:37:15
And I think that's good
coverage of everything from a
00:18:38:12 - 00:18:40:14
kind of what
we're kind of expecting to see.
00:18:40:14 - 00:18:42:03
There's not many announcements
00:18:42:03 - 00:18:46:01
other than from an employment taxes
side for the budget already.
00:18:46:01 - 00:18:49:21
I think the investments in more offices
is going to be absolutely critical.
00:18:49:21 - 00:18:52:09
They're the ones that we are.
00:18:52:09 - 00:18:56:00
We are kind of
more aware of is obviously the VAT on
00:18:56:08 - 00:18:59:06
private school fees
potentially coming through.
00:18:59:06 - 00:19:02:06
What will that mean to how,
00:19:02:19 - 00:19:06:01
you know, it could have some impact
on how businesses recruit potentially.
00:19:06:17 - 00:19:07:11
I know one of
00:19:07:11 - 00:19:09:16
the discussions
I've had with a few clients recently is:
00:19:09:16 - 00:19:14:11
‘what can we do to help our employees
with school nursery fees’?
00:19:14:19 - 00:19:17:17
There's not a lot there, really,
if I'm honest.
00:19:17:17 - 00:19:22:08
There's a very, very tight nursery
exemption that employers could look at.
00:19:22:08 - 00:19:25:08
But you need to be funding managing
the nursery.
00:19:25:08 - 00:19:25:21
It's more or less
00:19:25:21 - 00:19:30:05
you need to have an in-house nursery
for that to be, a kind of tax exempt
00:19:30:10 - 00:19:33:14
benefit that you could provide
from a school fee perspective.
00:19:33:21 - 00:19:35:17
We've got the optional remuneration rules.
00:19:35:17 - 00:19:36:06
That would
00:19:36:06 - 00:19:39:10
mean that that's going to be taxable
from a salary sacrifice perspective.
00:19:39:20 - 00:19:43:04
But one thing, I suppose it
keen to just get a bit of a view on here
00:19:43:04 - 00:19:48:03
is do we think potential policies
like that could redistribute the work,
00:19:48:03 - 00:19:51:17
or will people move to different regions,
maybe by overseas potentially.
00:19:52:00 - 00:19:55:19
Will we see that affect,
you know, how people manage their income
00:19:55:19 - 00:19:58:19
and what employers provide
from a reward perspective?
00:19:58:19 - 00:20:00:19
Robin,
if you've got any thoughts on that or?
00:20:01:21 - 00:20:04:23
Yeah, I mean, I mean, at the moment
when I look at some of the employers
00:20:04:23 - 00:20:10:17
that we deal with, some of the assignees
that are high net worth individuals,
00:20:11:03 - 00:20:14:11
they will provide a package, often
in regards to school fees,
00:20:14:11 - 00:20:16:23
they'll pay them a certain cash allowance,
00:20:16:23 - 00:20:21:06
I suppose when we look at this
that they're for or is that the amount
00:20:21:06 - 00:20:24:12
that they're going to have to pay again
to increase, which is going to increase
00:20:24:12 - 00:20:28:23
tax equalisation costs and costs
of actually employing these individuals
00:20:28:23 - 00:20:34:19
to the employer, which is going to be
a potential drain and could impact
00:20:34:19 - 00:20:38:19
mobility and the attractiveness
of these people coming to the UK.
00:20:40:05 - 00:20:43:14
I suppose that we've got to think about
what does that do more broadly
00:20:43:14 - 00:20:48:17
to how organisations
set their pay, set their reward structure,
00:20:49:16 - 00:20:51:20
what can they do for other individuals
00:20:51:20 - 00:20:54:23
where minimum wage is going up,
where they're potentially having to alter,
00:20:55:10 - 00:20:58:12
you know, allowances for other employees
that are within that business?
00:20:58:23 - 00:21:01:10
So it looks like it's going to be
some additional cost to look.
00:21:01:10 - 00:21:05:15
And what can they do to mitigate that,
particularly where they've got pressure
00:21:05:15 - 00:21:07:10
from a compliance perspective.
00:21:07:10 - 00:21:10:10
And also increase costs with minimum wage
00:21:10:11 - 00:21:14:02
differentials and also pensions
potentially to
00:21:14:02 - 00:21:17:04
we've not seen movements
in auto enrolment rates for a while.
00:21:17:10 - 00:21:19:14
We are seeing rumours around.
00:21:19:14 - 00:21:22:22
We always see rumours around tax relief
on pensions and what that could mean.
00:21:23:07 - 00:21:29:20
And will that further, I suppose not help
the private sector employees.
00:21:29:20 - 00:21:30:16
You know, they'll be
00:21:30:16 - 00:21:32:06
there'll be more restrictions on things
00:21:32:06 - 00:21:36:12
like increasing their pension contributions, perhaps, and a little bit more of a
00:21:37:12 - 00:21:38:00
a kind
00:21:38:00 - 00:21:42:09
of distinction between private sector
pensions and public sector pensions,
00:21:42:09 - 00:21:46:01
which we've seen typically be defined
benefit or career average schemes.
00:21:46:09 - 00:21:49:05
So there's quite a lot of things
in the market
00:21:49:05 - 00:21:53:10
and in society
that we, you know, could be exacerbated.
00:21:53:10 - 00:21:56:10
Those differences between them over
the next 12 to 18 months,
00:21:56:19 - 00:22:02:04
especially in the context of the public
sector, strikes for for pay rises.
00:22:02:04 - 00:22:06:03
Are we going to see pay rises
in the private sector to attract people?
00:22:06:04 - 00:22:06:21
Any thoughts on that?
00:22:06:21 - 00:22:08:17
Michelle and Robin,
I'll start with you, Michelle.
00:22:08:17 - 00:22:12:07
First, if you are seeing anything
from clients, from a pressure
00:22:12:07 - 00:22:15:07
and cost perspective with you, with your,
00:22:15:13 - 00:22:17:19
with with your contacts.
00:22:17:19 - 00:22:18:04
Yeah.
00:22:18:04 - 00:22:23:11
I mean, there's there's definitely
an increase in cost consciousness.
00:22:23:20 - 00:22:25:22
from a, from an immigration perspective,
00:22:27:11 - 00:22:27:22
you know,
00:22:27:22 - 00:22:31:13
immigration fees in particular on,
particularly cheap.
00:22:32:09 - 00:22:35:04
and with the, the increased
00:22:35:04 - 00:22:38:06
minimum salary requirements
for, for sponsorship,
00:22:38:06 - 00:22:43:12
we have seen a lot of employers who are,
you know, really looking at the cost
00:22:43:12 - 00:22:45:05
and whether it's beneficial for them
00:22:45:05 - 00:22:49:03
to actually proceed with an assignment
or with a new hire.
00:22:49:15 - 00:22:54:04
So, you know, these
these changes are likely to,
00:22:54:04 - 00:22:59:08
I think, drive that, you know, that the
the examination of the cost,
00:23:00:16 - 00:23:04:02
for for a new recruit or an assignment.
00:23:04:15 - 00:23:08:06
and we've definitely seen, you know,
the impact of that where employers have,
00:23:08:10 - 00:23:12:02
have backed away from,
from sponsoring individuals
00:23:12:02 - 00:23:17:11
just due to the cost, particularly around
those junior level positions
00:23:17:16 - 00:23:21:04
with the more senior individuals, there
doesn't seem to have been so much of a
00:23:22:08 - 00:23:23:13
of a of an impact.
00:23:23:13 - 00:23:26:13
But those junior level positions
where it's much more,
00:23:27:06 - 00:23:29:18
difficult to sponsor them.
00:23:29:18 - 00:23:33:14
we've definitely seen
a, you know, a number of, of clients
00:23:33:14 - 00:23:36:13
sort of like back away
from, from those kind of moves.
00:23:37:11 - 00:23:39:14
Thank you. Robin.
00:23:39:14 - 00:23:39:22
Yeah.
00:23:39:22 - 00:23:42:05
Just tallying with Michelle's, comments.
00:23:42:05 - 00:23:45:15
And I think this it just reflects
a trend in that we've seen over the last
00:23:45:15 - 00:23:49:01
few years at cost
conscious ness is very key.
00:23:49:18 - 00:23:52:09
What I've seen is a decrease
00:23:52:09 - 00:23:55:23
in traditional assignments
over the last few years,
00:23:55:23 - 00:23:59:13
especially following the whole advent,
Covid and remote work.
00:23:59:13 - 00:24:03:03
And what I'm seeing is
instead of traditional assignments,
00:24:03:03 - 00:24:05:21
we're seeing a lot more,
00:24:05:21 - 00:24:08:19
actual transfers,
because the cost associated
00:24:08:19 - 00:24:13:13
with structuring these moves is a lot
cheaper than tax equalised assignments.
00:24:14:02 - 00:24:17:18
And we're also seeing
a lot more virtual hybrid arrangements
00:24:18:02 - 00:24:21:21
where you have a combination of someone
who's a short term business visitor
00:24:22:12 - 00:24:25:09
and they do some of their assignment
virtually.
00:24:25:09 - 00:24:28:18
and the reason behind
that is they don't create
00:24:29:12 - 00:24:33:13
tax in the opposite jurisdiction,
and it reduces the administrative costs
00:24:34:04 - 00:24:37:10
of the employer
supporting them from a tax perspective.
00:24:38:01 - 00:24:41:01
And I think when we go into pensions,
00:24:41:03 - 00:24:43:15
if we go into anything muted into the,
00:24:43:15 - 00:24:48:09
restriction to relief on 30%,
that's going to increase complexity
00:24:48:20 - 00:24:51:19
and potentially decrease
00:24:51:19 - 00:24:55:01
assignments and mobility,
because the cost of administering
00:24:55:03 - 00:24:58:08
that will become more expensive
for employers, potentially.
00:24:59:04 - 00:25:01:05
Agreed.
00:25:01:05 - 00:25:02:17
Personally, I've kind of surprised
00:25:02:17 - 00:25:05:17
if they did do anything with pension
tax relief given it.
00:25:05:17 - 00:25:08:03
It's such a sensitive and emotive area.
00:25:08:03 - 00:25:09:21
And, you know, ultimately you've got
00:25:10:21 - 00:25:13:12
you've got different, you know, pension
schemes in society.
00:25:13:12 - 00:25:16:09
We've got different complexities
with how tax relief is provided,
00:25:16:09 - 00:25:19:05
how salary sacrifice
operates in pension schemes,
00:25:19:05 - 00:25:22:02
and then the distinctions
between public sector and private sector
00:25:22:02 - 00:25:25:14
pensions at the moment, which seem to be
getting further away from each other.
00:25:25:21 - 00:25:28:21
So it would be one to watch. Definitely.
00:25:29:02 - 00:25:32:02
Especially when we consider the,
00:25:32:02 - 00:25:35:02
I suppose, election pledges,
you know, no, no
00:25:35:02 - 00:25:38:10
tax changes, no national insurance changes
for individuals.
00:25:39:00 - 00:25:41:11
Will that we see that
when we come to October?
00:25:41:11 - 00:25:45:20
Let's wait and see. I suppose
getting to the end of the point on the
00:25:46:07 - 00:25:50:12
this podcast, this
this episode of the podcast,
00:25:51:14 - 00:25:54:19
if you have to throw out a surprise
or a rumour,
00:25:54:19 - 00:25:57:19
you've heard that you think, oh,
that might have some legs?
00:25:57:22 - 00:26:00:06
Robin, anything that you're mindful
00:26:00:06 - 00:26:03:14
of there from a global mobility
or a broader perspective?
00:26:04:23 - 00:26:05:07
Yeah.
00:26:05:07 - 00:26:08:07
I mean, the background,
there's a few things that have been mooted
00:26:09:00 - 00:26:11:11
before.
00:26:11:11 - 00:26:12:17
there's a lot there's a lot
00:26:12:17 - 00:26:16:15
in the background about harmonising,
the position
00:26:16:20 - 00:26:19:20
on income taxes and Social Security,
00:26:19:20 - 00:26:22:21
where people will work remotely overseas.
00:26:22:21 - 00:26:26:10
So there's a uniform tax treatment
between jurisdictions.
00:26:26:10 - 00:26:31:00
There's been a lot of consultations
from the OECD and the UN tax Committee,
00:26:31:13 - 00:26:35:19
because trying to administer
these arrangements where you have remote
00:26:35:19 - 00:26:39:10
workers, it's resulting
in potentially loss of tax revenues
00:26:39:23 - 00:26:43:11
to the country
where the employer is based.
00:26:44:06 - 00:26:47:08
And then that transfers
potentially the liability to the country
00:26:47:08 - 00:26:48:18
where the individual works remotely.
00:26:48:18 - 00:26:53:04
And sometimes those are low tax
jurisdictions or there's no income tax
00:26:53:17 - 00:26:54:06
at all.
00:26:54:06 - 00:26:58:14
So you will potentially see some move
to alignment there.
00:26:58:14 - 00:27:02:12
And simplification
I expect at some point in time as well,
00:27:02:21 - 00:27:06:12
they'll relook at temporary workplace
relief as well
00:27:06:12 - 00:27:10:22
and simplify that because the rules
there are potentially complex.
00:27:11:08 - 00:27:13:15
So I think they'll look at that as well.
00:27:13:15 - 00:27:16:15
The other thing they will look at,
I think from an expat perspective
00:27:17:01 - 00:27:20:13
and try and legislate for
this as well, is the TAC, the
00:27:20:21 - 00:27:23:20
the National Insurance,
Social Security treatment of bonuses,
00:27:24:23 - 00:27:27:23
and cash payments
where someone's internationally mobile
00:27:28:09 - 00:27:31:17
because at the moment there's either
what we call an all or nothing approach.
00:27:32:00 - 00:27:36:08
So it's 100%
NIC on the bonus or nothing at all.
00:27:37:10 - 00:27:41:21
Or you look at the actual period and
look whether someone was socially insured.
00:27:42:07 - 00:27:46:12
And there's a lot of ambiguity
there as to what actual treatment applies.
00:27:46:12 - 00:27:50:17
So I think they'll look
to potentially, legislate for that.
00:27:51:05 - 00:27:55:01
And anything, Michelle, that you're aware
of, a surprise in the field.
00:27:55:14 - 00:27:57:12
There's
nothing really concrete at the moment.
00:27:57:12 - 00:28:01:03
Obviously there's been quite a bit
in the press around potentially
00:28:01:03 - 00:28:04:16
forging closer relationships back with the
EU might be looking
00:28:04:16 - 00:28:08:23
at expanding some of the temporary worker
youth mobility schemes,
00:28:09:09 - 00:28:12:13
into EU countries,
but nothing concrete at the moment.
00:28:12:23 - 00:28:15:13
I think, you know,
the likelihood of changes
00:28:15:13 - 00:28:18:13
is greater than it than it has been.
00:28:19:01 - 00:28:21:13
but at the moment
there's nothing really there
00:28:21:13 - 00:28:24:13
beyond,
you know, what we're seeing at the moment.
00:28:24:14 - 00:28:26:17
Thank you both for those comments as well.
00:28:26:17 - 00:28:29:17
I think from my side of the fence, what
00:28:29:17 - 00:28:33:01
what I'd like to
see is, is a is a bit more,
00:28:34:19 - 00:28:35:14
a bit more around
00:28:35:14 - 00:28:37:19
IR35. It's very complex.
00:28:37:19 - 00:28:38:16
It's in the grey.
00:28:38:16 - 00:28:43:07
It's something that HMRC will challenge
consistently at the moment.
00:28:43:15 - 00:28:45:17
There needs to be,
00:28:45:17 - 00:28:47:17
better transparency with the rules
00:28:47:17 - 00:28:51:03
so it's clearer
been asked for for a long, long time.
00:28:51:03 - 00:28:54:04
When we see that, let's say
I think that that would be
00:28:54:04 - 00:28:57:06
one thing
that would be nice to have an update on.
00:28:58:08 - 00:29:01:09
I think the thing from,
I suppose from a compliance
00:29:01:09 - 00:29:05:04
of raising funds for the Exchequer,
I would not be surprised.
00:29:05:04 - 00:29:09:12
And I have heard muted rumours
on this around, HMRC looking more
00:29:09:12 - 00:29:12:16
at corporate criminal offence
with facilitation of tax evasion.
00:29:13:09 - 00:29:15:18
That legislation is not being used much.
00:29:15:18 - 00:29:17:05
there's been very few investigations
00:29:17:05 - 00:29:19:19
over the last few years
since you got introduced.
00:29:19:19 - 00:29:21:20
Will we see an uptick in that potentially?
00:29:21:20 - 00:29:24:07
Will we see an uptick in in things
generally
00:29:24:07 - 00:29:27:06
because of more compliance
reviews, potentially?
00:29:27:06 - 00:29:30:22
This is something to watch out for
as we approach the budget
00:29:30:22 - 00:29:33:02
and get beyond
the budget in October.
00:29:34:09 - 00:29:34:20
Thank you
00:29:34:20 - 00:29:37:21
very much for, Robin and for Michelle.
00:29:37:21 - 00:29:41:12
Your comments, and advice
during this podcast.
00:29:42:05 - 00:29:45:12
All that’s left for me to do
is say thank you for listening.
00:29:46:04 - 00:29:50:03
The next episode will be released
on the 27th of September,
00:29:50:09 - 00:29:54:09
and we'll be looking at policy changes
that will affect businesses.
00:29:54:09 - 00:29:58:12
And I appreciate everyone's time and I
hope everyone has enjoyed listening today.