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Leading Trade Associations call for HMRC action on proliferation of Elective Deduction Models

Orange Genie Group has also announced its support for the request.

The Elective Deduction Model (EDM) is being promoted as a method of classifying workers as self-employed for employment law purposes but employed for tax purposes. Using this combination of status the clear aim is to side step National Minimum Wage requirements. Agency Workers Regulations, Pension auto-enrolment and the planned introduction of onshore intermediaries legislation.

FCSA Non-Exec Chairman Matthew Brown stated, “We are incredibly concerned about the use of these models. They afford very little protection to the worker given the avoidance of employment status and create huge risks to the Recruitment Businesses and End-Clients, caught in this scheme. We urge HMRC to review these models as a matter of urgency and to reassure the professional recruitment sector that this clear avoidance tactic will be prevented.”

Ann Swain, Chief Executive of APSCo commented, “APSCo works hard to raise standards in the recruitment industry and fully supports robust self-regulation in the intermediaries sector.  We would oppose the promotion of any model designed specifically to avoid existing or new tax or employment legislation, and APSCo therefore urges HMRC to review this model.”

REC CEO Kevin Green said: “Any model that markets the evasion of NMW and AWR as key selling points has no place in our industry, and any business reliant on such unsustainable models for survival is not the sort we want or need in our sector. These models fundamentally undermine compliant recruitment businesses and we expect HMRC to take swift, decisive action against this and any future models that so profoundly distort the otherwise professional recruitment market.”


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