Last night, the Government announced a new voluntary sleep-in compliance scheme; interestingly it was the evening before the halt on HMRC enforcement action expired. No doubt you will have already seen, heard, read about this – the upshot of it is they are offering providers an opportunity (although they will still need to be accepted on to this by HMRC) to self-review, identify historical liabilities and rectify within a 15 month period, essentially offering a time concession to become compliant. Read the announcement here.
At the moment though there are no specific details of the mechanisms, drilling down in to how it will work and the burden to providers to opting in to this, whether providers can opt out at any time, impact etc. With so little information detail available how can providers make a decision on the best course of action? At this moment in time, it’s like taking a shot in the dark. We expect further details to emerge in coming days (?) so that providers have an understanding of the full picture before deciding how to proceed, although the scheme seems to have already started with an end date of March 2019 being advised.
See below some key points from this announcement:
- The scheme runs from 1st November 2017 and closes on March 2019 (arrears to be paid to workers by this deadline).
- The scheme provides 12 months of ‘safe time’ to conduct a self-assessment and a further 3 months to pay.
- Employers who decide not to opt-in to the scheme will not be offered any further concessions. They will be subject to the full HMRC investigative process – including financial penalties (except for sleeping time arrears accrued before 26th July 2017), public naming and possible prosecution where appropriate.
- There is acknowledgement on page 12 (National Minimum Wage Law – Enforcement) that government guidance was misleading before February 2015
- There is nothing to explain away how HMRC have assessed providers as being compliant.
- There is acknowledgment that the government are in discussion with the European Commission and is exploring options but nothing further on funding has been confirmed at this stage.
The decision facing providers on whether they should look to opt in is a huge one, with so many unanswered questions and unclear pitfalls. Many questions remain, for example, if providers are calculating 6 years back, then when does that 6 years start? At the point where the provider opts in? So what’s the benefit of providers opting in now?
Also we know the Government hasn’t confirmed if any type of financial assistance will be available. In our on-going work, in collaboration with other representative groups, we have been re-iterating financial help must be made available to minimise impact on the unsustainability of the sector and that the timeliness of any financial help is of the utmost importance to coincide with any scheme encouraging self-review/re-commencement of HMRC enforcement action. We do not know if/when any ‘compensation’ will be available and we do not know whether providers that have voluntarily declared their underpayments will have recourse to any ‘compensation’ retrospectively if it later becomes available. Another point to consider when deciding whether to opt in to this voluntary scheme.
We continue to work alongside other collective and representative groups to engage and fight for funding to be available, providing updates as we get them. In previous discussions with Government Officials we have re-iterated the need for financial help for providers from the Government, as without this, regardless of time concession, providers will be affected and potentially have to close, with vulnerable people being directly affected.
Clearly, this nightmare continues to hang over providers. Of course, I am no legal expert and cannot advise members what to do. All I would say is it is important to have all the facts before deciding whether self-reviewing is sensible or not – and I hope all those facts are available soon.
ARC England Director