Spent all your time reading about IR35 but don’t know about Key Information Documents or Confirmation of Payee?

Everyone is talking about IR35, experts have cropped up and Social Media is full of suggestions and solutions. It is the talking point for Recruitment Businesses and their clients to get their heads round by April. We’ll park that today though as there are two other pieces of legislation hitting recruitment businesses at the same time which aren’t getting nearly as much exposure. Key Information Documents and Confirmation of Payee

Key Information Document:

This new regulation will take effect from 6 April 2020. At this point, all agency workers must be given a key information document before agreeing terms with an employment business. The key information document will be one of the first things and agency worker receives, typically at point of registration but certainly prior to an assignment. The regulation does not apply to agency workers with existing terms with an employment business, but they will be entitled to a key information document when they sign up with a new employment business.

Purpose of the new regulation:

The key information document is intended to improve transparency of information for agency workers, particularly around pay. It will give agency workers more immediate access to key pay related information before agreeing terms with an employment business and a clear idea of how any fees and deductions will affect their pay.

Businesses are not expected to include all relevant contractual information within the key information document. Its purpose is to present key information in order to give agency workers a brief overview of how their prospective terms of engagement affect their pay over the course of an assignment. The figures in the key information document will demonstrate how a proposed rate of pay is affected by fees and deductions made throughout the supply chain.

As an agency if you use an umbrella company you must ensure that you have checked with them that they are taking this seriously and what they are doing to make sure they are complying to the legislation, if you are using an outsourced finance and back office provider also ensure they are making the relevant changes. Quba Solutions are currently making a number of changes to our software that we will be implemented prior to Aprils deadline.

For some bedtime reading on key information documents –https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/865808/key-information-document-for-agency-workers-business-employer-guidance.pdf

Confirmation of Payee:

Banks have never checked the payee name on an account, you can pay in a cheque to Mickey Mouse and it will still clear. Not anymore!

Confirmation of Payee is a new way of giving customers (both personal and business) greater assurance that they are sending payments to the intended recipient, helping them to avoid making accidental, misdirected payments to the wrong account holder, as well as providing another layer of protection in the fight against fraud and scams. A payee is the term used to describe the person or business that you are paying money to.

So in essence it is crucial that the agency, if paying someone, ensures that the name on the account is the exact name (spelt correctly) otherwise this payment will indeed be returned or held by the bank. If you are paying a ltd company then the ltd company full name must be on as the payee. We don’t envisage this causing huge problems but it is something that all recruitment business owners must be aware of as it may require a few ‘tweaks’ in processes.

For detailed info:

https://www.ukfinance.org.uk/confirmation-of-payee