Managed Service

What is IR35? IR35 or ‘off-payroll working rules’ became law in 2000 where it was introduced to crack down on freelance contractors who had incorporated themselves into what’s known as a Personal Service Company (PSC) that could take advantage of the tax benefits but were still considered to be an employee, aka ‘disguised employees’. IR35 was to ensure the contractor assessed themselves properly by assignment paying a similar amount of income tax and NI as if they were employed where they were really a disguised employee. The liability for getting this assessment wrong generally sat with the PSC. HMRC made some changes to IR35 in the Public Sector in April 2017 and announced in 2018 they would make similar changes to the Private Sector from April 2020 to stop the perceived tax abuse by companies engaging with what are thought to be disguised workers and paying them as self-employed. What are the changes I need to know about? It’s important to know that IR35 and the method for determining an IR35 status is not actually changing. What is changing is the responsibility and liability for getting the assessment wrong. From April 2020, for private sector hirers, the responsibility for determining the IR35 status of a PSC will move from the PSC to the company that engages with the PSC (the hirer). The liability for getting the status wrong and / or not deducting and charging the right taxes and NICS will initially move to the fee payer (commonly a recruitment agency) as long as everyone in the supply chain fulfils their responsibilities. This liability currently sits with the PSC. Should HMRC find that a hirer hasn’t taken ‘reasonable care’ when setting the IR35 status, the liability will be transferred to the hirer whether they are the fee payer or not. In certain circumstances the liability can move up the supply chain. If an assignment is deemed to be inside IR35, the contractor can still be paid via their limited company, but the fee payer is obliged to charge Employers NICs and Apprenticeship Levy and deduct Employees NICS and Income Tax from the payment made to the PSC. This status determination is only for tax purposes. HMRC states it doesn’t apply to employment status; however, claims are already being made by contractors in the Public sector - if they are being taxed as a worker then should they not be treated as a worker and be entitled to holiday pay, auto enrolment and other worker rights? Small company hirers (likely to be the Companies House definition of less than 50 employees) are out of scope of this change. Anti-avoidance measures will be included in the final legislation and measures will be taken for non-incorporated hirers such as partnerships or public sector entities. How is IR35 Status determined? There are a number of pointers towards a PSC being inside or outside for an assignment which are supported by case law. Items such as taking financial risk, there being the right of substitution, mutuality of obligation all point towards whether someone is inside or outside of IR35. Simplistically, if a contractor and employee are indistinguishable from each other in how they are treated but for the fact one is paid via their PSC it is highly likely they should be deemed to be inside IR35. How can I ensure I’m prepared for the changes? First and foremost, you need to make sure you understand the rules and what is likely to deem an assignment to be inside or outside of IR35. Whilst Meridian are not qualified to give professional advice on these matters we understand the issues involved and are partnering with legal teams who can offer professional assistance with making determinations regarding IR35 status. If you would like any further information on the changes to IR35 or would like any help in how to prepare for this change please email IR35@meridianbs.co.uk Form ID:4540

In October 2014, NFU Regional Director William White said “labour may rival weather as the biggest challenge to growers in the future.” Over the last few years, his words have proved increasingly correct. The Statistics UK unemployment stands at 4% in September 2018 - the lowest levels of unemployment since 1975. Across the EU unemployment is also falling (Germany 3.4%, Poland 3.7%, Romania 4.5%). Research for the 2018 season shows the following: 41% of producers have seen a drop in applications for seasonal pickers (EAP) 42% of temp/seasonal employers couldn’t fill all their requirements (REC) 2 in 10,000 picking applications British (Concordia) Hundreds of tonnes of produce rotting in fields Feedback from ALP Associate Members (Labour Users) tells us: the volume of returners dropping by a third or more labour users are having to invest heavily in accommodation and transport worker experience is a top priority for labour providers and labour users to be able to survive 66% of labour providers have seen a drop in volume of labour; 71% report a drop in quality 83% of labour providers have short supplied their clients in the 3 months to September 2018 The facts speak for themselves; labour is harder to find and more expensive to supply. For labour providers and labour users alike. The Brexit Effect The UK’s vote to leave the EU has had a number of effects on labour supply: The value of the £GBP has fallen, making working in the UK less attractive to migrant workers Some EU workers have felt ‘less welcome’ as the referendum was explained by many as a reaction against foreign workers As the future immigration policy of the UK is unclear, many EU workers have experienced uncertainty about their future working in the UK Many other EU economies are flourishing and the relative value of the Euro against the £GBP is making other EU countries (such as Germany) more attractive Local Labour Supply The statistics above are based on the national picture, and it is important to remember that at a regional level, the problems can be much worse. In Herefordshire, there are 4 large soft fruit farms need c.3,400 seasonal staff, but there are only 769 registered jobseekers in the area. One of the fruit farms had to send 100 bins of apples for juice instead of eating, at one fifth the price, purely because they didn’t have the workers to harvest in time. In Cornwall, recent research found that after the Brexit vote recruitment immediately became more difficult for horticultural farms, harvests could not be lifted in full, and staffing requirements dwindled to 65% of need. Food is literally rotting in the fields. How much do you know about your local labour market? What’s the Answer? The ALP is lobbying for a Seasonal Workers Scheme, and a sensible UK immigration policy that supports UK businesses, and many other industry bodies are supporting this approach. At a site level, there are various things you can do to influence the future of the UK labour market: Contact your MP – invite them to your site to discuss the issues you are facing Respond to Government and other industry surveys – help build the business case Write to the Defra Access to Labour Team and the Home Office Immigration Minister Speak to the media and tell your story In the meantime, however, our best advice is that labour providers and labour users need to work in partnership to overcome the challenges their businesses are both facing. From regular planning meetings and accurate forecasting to creating a positive worker experience (from recruitment through onboarding and beyond) that will lead to high referral rates and better retention rates, the best results can only be achieved by working together.

Local Transport Today (LTT) has been at the forefront of industry news and events within transport planning for the last 30 years and as part of the publication’s celebrations, they would like to highlight a few of the stars of today who are leading the way with regard to the future of transport planning and innovation. LTT and Meridian are working together to feature 30 up-and-coming stars who have already shown real innovative acumen when it comes to solutions within transport planning. As part of this, those individuals will be invited to provide a short article about who they are, what they have done in their short time in the industry, where they think the future of transport planning is heading and the skills that will be required. Whilst we have named this ’30 under 30’, it doesn’t matter so much what their age is, as long as they are seen, in the industry, as a future star. If you know someone who meets the criteria then, please do not hesitate to get in touch. Contact: Fred Ewing | Managing Consultant t. 0161 929 3804 | m. 07949 585037 Email: fewing@meridianbs.co.uk

Thank you to everyone who helped Meridian celebrate the fantastic landmark that was our 30th Anniversary! We held a 1980s themed dress down day and celebrations across the branch network on Friday! There was a competition for the best-dressed branch and individuals and this prize went to Fred Ewing and Nuala Slim from Manchester Built Environment for this exceptional effort! In second place was HR/Compliance for the effort they put into decorating their branch! A special mention goes to Michael Bulmer in Newcastle Upon Tyne for his amazing Freddie Mercury impression!

As we approaches our 30th anniversary, we reflect on our journey and successes to-date and share our plans for future growth. Meridian’s first branch was founded in Altrincham in 1989, by Chairman Rod Kavanagh, where the company headquarters remained until 2016 when they moved to new state-of-the-art offices near Manchester Airport. Having expanded from just four desks in 1989, the company has grown to be one of the UK’s largest privately owned recruitment agencies with a £100M turnover business with 50 branches across the UK’s major towns and cities, from Glasgow to Exeter. Over the years Meridian has earned a reputation for a high-quality consultative approach, excellent customer service and industry-leading expertise. Meridian has witnessed the recruitment industry change dramatically over the last 30 years; an 80s recruitment consultant would have relied on a rolodex and a fax machine they now have access to online job boards, applicant tracking systems and social media. However, with great power comes great responsibility and the recruitment industry faces more legislation than ever before – AWR, GDPR and IR35 to name but a few. Meridian has always prided itself on being at the forefront of any legislative changes affecting the industry allowing them to offer their clients a compliant approach and expert advice to protect their business. In January 2017 Derek Skelton was appointed as Managing Director of the Industrial sector and within a few months, he took additional responsibility of the Office & Professional and Health operations. This resulted in some significant contract wins, the weekly gross margin growing and the various business units improving the net profitability. In September 2017, Derek was promoted to Chief Executive Officer for the Meridian Group. Today Meridian’s extensive network of branches provides over 4,000 temporary staff on a weekly basis and places over 1,000 permanent candidates each year. Employing 245 staff, the company fills in excess of 200,000 bookings every year, successfully supplying to over 1,500 companies. Derek Skelton Commented: “It is an awesome achievement for any company to celebrate their 30th Anniversary and I feel very proud to be leading such a successful business which is full of fantastically talented people who have been making a difference to recruitment for the last 30 years! The future is bright for Meridian; over the last 30 years there have been some tough times but the business has navigated its way through those and we have big plans for growth! The best is yet to come for Meridian - watch this space!” To celebrate this fantastic landmark, on 24th May we are holding 80s style celebrations around the branches and at Head Office. We will be decorating the branches and there will be a 1980s themed dress down day. Hopefully there will be plenty of ra-ra skirts, legwarmers and fluorescent tights! Prizes will be awarded to the branch that makes the most effort!

The Taylor Review with the full title Good Work: The Taylor Review of Modern Working Practices (July 2017) was a review submitted to the government concerning employee and worker rights in UK labour law following the government’s concern about how vulnerable workers were being treated and the changing landscape of the world of work, particularly in response to the Gig Economy. In response to the Taylor Review, the Government announced in December 2018 the ‘biggest package of workplace reforms in over 20 years!’ stating they would adopt 51 of the 53 Taylor Review recommendations One of the changes announced was the repeal of Regulation 10 contracts (Swedish Derogation), or pay between assignment contracts from the Agency Worker Regulations 2010 with affect from 6th April 2020 What is Swedish Derogation? The Agency Workers Regulations 2010 (AWR), which came into force in October 2011, gave agency workers the entitlement to the same, or no less favourable, treatment for basic employment and working conditions, if they completed a qualifying period of 12 weeks in a particular job. Regulation 10 provided an exemption to equal pay, as long as the worker was offered a permanent contract of employment, paid the worker between assignments and complied with various other conditions. In return, the Agency Worker received all of the benefits of employed status. Although legal and originally agreed by the UK Government, the CBI & the TUC, the practice was a controversial model that avoided the workers being paid parity with a comparable worker employed directly by the end hirer. There were doubts about whether these contracts worked in practice, with some claiming that they were used to exploit vulnerable workers. Indeed The Taylor Report cited significant abuse of the Swedish Derogation. What’s Changing? The new legislation will remove the options of opt-out of pay comparison and pay between assignments from 6th April 2020. This means that agency workers will no longer be entitled to pay between assignments but, more importantly, they will be entitled to the same hourly pay as a permanent comparator worker employed by the end hirer after 12 weeks. Is this something I need to worry about? For organisations that depend on a flexible workforce which is employed on Swedish Derogation contracts by their agency, the financial impact could be significant. A recent Impact Assessment from the Regulatory Policy Committee estimates that between 8% - 10% of all agency workers in the UK (104,000 - 130,000) are employed on Regulation 10 contracts and that the additional costs associated with the removal of Regulation 10 contracts will be somewhere between £227.5M & £381.1M to UK hirers per year. In addition, The Resolution Foundation estimated the pay gap to be c. £300M. There is a further estimated cost of between £3.2M & £3.6M for the transitional costs of conforming to this change in legislation. We estimate that for every 100 workers where the pay differential is just £2 per hour, the annual labour costs, including on costs, could increase by over £500,000 pa. Businesses need to be ready to adhere to the new regulations as seamlessly as possible and employers should consider implementing the new rules about removing employees from Swedish Derogation given the rights of employees to claim compensation for a failure to do so. How can I be prepared? It’s important that businesses start preparing at the earliest opportunity to ensure a smooth transition when removing workers from Swedish Derogation contracts. In addition to the more practical aspects of the removal of Swedish Derogation, moving to equality of pay will have financial implications to businesses, so it’s vital that businesses consider the impacts now and discuss this within the organisation, making all key stakeholders aware of the impending changes. It’s also important to ensure budgets and business plans consider the potential for increased wage bills. Speak to your current agency to make sure they are aware of the impending changes and ask them how they plan to change their current Swedish derogation contracts to ensure they are compliant by April 2020 ensuring there is no disruption to your workforce. Meridian is working with our clients to assist them in planning ahead and preparing in order to reduce the impact of the new legislation. If you are uncertain about any of the above, we can help you to ensure you and your business are prepared and ready for this significant impending change, just get in touch at: adviseme@meridianbs.co.uk Form ID:4540

As part of our campaign to raise awareness of Mental Health issues in the workplace, Meridian is pleased to introduce one of our dedicated Mental Health First Aiders Richard Ward from HR. In the video below Richard explains what Mental Health means to him and why it is so important to Meridian:

Only 7% of teenagers want to join the construction industry, as reported this morning in the construction news. Reading this article motivated to write a long post on LinkedIn about why I think this is. After posting, I decided to put some more thoughts down and make it into a blog. So why do so few teenagers want to join the construction industry? In my opinion, it is because schools promote the construction industry as a negative career choice. When I was at school, many years ago now, in year 10 and 11 it was all about going to college, then to University. School's often promote how many of their students go to college or University. This results in them not encouraging students to take other paths. In those same years, my school also removed the "naughty kids" and those unlikely to get good GCSE's from the classroom. They did their basic GCSE's (English, Maths, Science) in their own classroom, and then for the rest of the time, they went to the local college to take a course in bricklaying, plumbing, painting, etc. This creates a negative image of the construction industry from the age of 14; that it is an industry for the less educated, an industry for the naughty kids. So many teenagers go to University these days. In 2016–17, there were 2.32 million students studying at UK higher education institutions. Many of these do a degree that does not lead naturally into a job. Many go to University for the "experience" or because all of their friends are going and therefore end up doing degrees that have no work relevance. This results in a lot of people in their early 20's with huge debt and little work experience entering the job market at the same time of year. There are not enough graduate jobs to go round, and many end up in jobs that they probably could have got without the degree and without the debt! Sending a high number of teenagers to University has become a vanity project for successive Governments. They should have focussed more on preparing teenagers for their working life and spend more time promoting the non-University options, such as the construction industry. Prior to working in construction recruitment, I had no idea about construction. About the opportunities - both blue and white collar. On the blue-collar side, if you were to leave school at 16 and enrol in a plumbing course, you could be earning £40-50,00 a year by your mid 20s. How many degrees lead to this salary? Becoming a painter, plumber, electrician, carpenter, etc also opens you up to the world of self-employment. A friend of mine left school at 16 with his basic qualifications. After 10 years working as a domestic plumber for a major new building housing contractor and being on their emergency call out roster, he decided to go it alone. Barely into his 30s and he is working for himself, earning far in excess of the national average. Why are schools not promoting the construction industry as a positive, lucrative career path? The white collar side is equally undersold; there is currently a shortage of Quantity Surveyors in the UK, there has been for about five years. The average salary for a Quantity Surveyor according to Indeed is £50,000 a year for someone with five years experience and relevant industry related qualification; Degree or HNC/HND in Quantity Surveying. You can add an extra £20,000 to that for a Senior Quantity Surveyor. Then you have estimator roles, contracts managers, project managers, planners and more. so many opportunities. So many unfilled job vacancies! The construction industry currently has a huge skills shortage in both blue and white collar. Teenagers need to be educated in schools that the construction industry is a lucrative, solid career - and not just an option for the naughty kids or those who are unlikely to get good GCSE's. With the knowledge I now have of the industry, I wish I could go back and tell a 16-year-old me about the construction industry. Instead of going to University to study Law, I would have done a construction related degree, or even got a trade. In a few months time, we will have GCSE and A Level results announced. Schools and colleges will once more promote how many A*s they get (or whatever the grading is now!), how many of their students went to college, went to University. What they will not do is promote how many of their students left college, didn't go to University and are earning £50,000 a year by the time they were 25. Maybe if schools and colleges were ranked on how successful their alumni were, based on the average salary they earn by the time they are 30-years-old, then maybe they will begin promoting the construction industry as a positive one to get into. Until schools and colleges change the perception of the construction industry and start promoting it as a positive, lucrative career choice, teenagers will continue seeing it as a negative industry, a negative career choice. If you are considering a career in recruitment, please click here to see what role we have available.

Our 'Bring your dog to work' scheme has been a huge success since it was launched back in October last year! We have met lots of new furry friends who we hope will become regular visitors at Meridian HQ! There are lots of benefits to bringing your dog to work as it is known to reduce stress; we have found it to be an instant mood booster! It also brings teams together as everyone loves to come over and find out all about the dog and make a fuss of them! Click here to find out more about working at Meridian.

Every new employee at Meridian is sent on Company Induction to help them settled in and find out all they need to know about working for Meridian. Our HR advisor Richard is in charge of organising this and he likes to set the new inductees a challenge to break the ice (and because he is an evil genius)! This month the challenge was to take a picture with as many things in it as possible but there were a few rules! Each thing in the photo, which is to be counted, must begin with a different letter of the alphabet... meaning a maximum of 26 things. They must label each thing that they wished to be counted with a “post – it” depicting the letter that it represents Any item/ object/thing used to represent a letter which is used by another inductee will not be counted.... essentially each item will only count towards the total score if it does not appear in anyone else’s picture. Head Office have joined in the madness and this is what they came up with (above) thanks to Ewan for posing! A- Advent Calendar B- Balloon C- Crayons D- Didgeridoo E- Ewan F- Fan G- Gloves H- Highlighter I- Ink Jet Cartridge J- Jellybeans K- Knife L- Lip Balm M- Mogwai N- Nail File O- Orange P- Paracetamol Q- Quality Street R- Ruler S- Scissors T- Tic Tacs U- Umbrella V- Violet Sweets W- Welcome Card X- X-Ray on Phone Y- Yeast Extract Z- Zero Sugar Drink