Legislative Compliance - Client

Two main areas are Freelancer Tax Risk and Freelancer HSE Risk.

Freelancer Tax Risk

Within the UK, MSC Legislation (see Fact Sheet), can result in the end user client, agent and/or accounting provider being held accountable for the PAYE and National Insurance Contribution of freelancers if specific criteria are not met. You should take expert advice on this, particular to your specific company. How you engage freelancers, how payments are made, the way payments are critical features which need clarifying and managed ensure this risk which can transfers directly through the company structure to the owners and directors as; personal tax risk, is assess correctly and removed.

International Tax Risk occurs from poor knowledge on in-county holding taxes, income taxes, frequency of payments and penalties for late or incorrect payments which can be substantial in the countries in which you operate. You need to ensure this is catered for in both your contract with the end user client and freelancer. Double taxation treaties, allowable expenses and the cost of in-country operations as deductibles and whether to have a registered company or branch office are pivotal decisions which when incorrect, may carry large losses.

JV and 'Local Content' partners can be useful as part of your strategy but once again care is needed in all business relationships.

IFA Tax Risk Advisors
IFA International Tax Advisors

Freelancer HSE Risks

End User Clients

An important consideration when taking on freelancers is the need to exercise a duty of care. Primarily this relates to risk management and particularly health and safety with an increasing focus on all organisations to implement management systems to ensure that health and safety risks are well managed. Thereby meeting legislation, customer requirements and worker expectations. Sound health and safety management controls the health and safety risks of a business organisation and activities, products and services and ensures that the business is compliant with all applicable legal requirements.

A structured approach to health and safety enables a company to:

  1. Eliminate or minimise risk to employees and other interested parties.
  2. Maintain and continually improve on health and safety performance.
  3. Ensure compliance within health and safety law.
  4. Demonstrate this conformance to others.
  5. Seek certification of the health and safety management system by an external organisation, if deemed appropriate.

The first steps for any company are:

  1. To assign health and safety accountabilities and responsibilities.
  2. To ensure access to competent health and safety resources.
  3. To develop a health and safety policy.
  4. To identify company health and safety risks.
  5. To conduct a risk assessment.
  6. To develop procedures that describe how to manage key health and safety risks.
  7. To ensure employees have received appropriate training.
  8. To ensure a process is in place to enable employee consultation to take place.

The next step, full implementation of a health and safety management system involves development and implementation of procedures and systems covering 17 major building blocks:

  1. Headline policies
  2. Planning for hazard identification, risk assessment and risk control
  3. Legal and other requirements
  4. Objectives
  5. Health and safety management programme(s)
  6. Structure and responsibility
  7. Training, awareness and competence
  8. Consultation and communication
  9. Documentation
  10. Document and data control
  11. Operational control
  12. Emergency preparation and response
  13. Performance measurement and monitoring
  14. Accidents, incidents, non conformances and corrective and preventive actions
  15. Records and records management
  16. Audit
  17. Management review

The duty of care should also extend to ensuring appropriate freelancer insurances are in place. These will vary depending on circumstances but could include Professional Indemnity, Employers Liability and Public Liability. HSE Systems providers can provide full systems which can be tailored to your requirements and underpin this with a risk assessment and insurance products if required.

IFA HSE Advisors & Systems Providers

 

Agencies

The conduct of employment agencies and employment business regulations requires the agency to ensure candidates are aware of known health and safety risks associated with end user assignments. In order to do this they require the end user client to have carried out risk assessments of activities related to the assignment.

The regulations also require the agency to ensure they provide suitably capable and qualified individuals that are ‘up to’ the assignment. Recruitment and selection processes are critical to this requirement.

Competency based interviews, psychometric testing, pre employment verification including employment history, qualifications and financial probity (in appropriate circumstances) are increasingly important in this area.

HSE Systems providers can provide full systems which can be tailored to your requirements and underpin this with a risk assessment and insurance products if required.

IFA HSE Advisors & Systems Providers