Recruiters! Exceed Contracting can help your temps impacted by the Maxipay/Ducas asset freeze.
On 5th December, the High Court granted a freezing order on the assets of Ducas Ltd (a payment service offered under the Maxipay brand), leaving thousands of temporary NHS workers uncertain about their Christmas pay.
If your temps are affected, or if there is a third party between you and their limited company, help them discover our fully compliant Umbrella service: Refer to Exceed
You may also like to share our article for temps which explains the Maxipay/Ducas situation: excd.info/protect_your_income
Reasons for the Maxipay/Ducas Asset Freeze
Ducas Limited, through Maxipay, supplies temporary staff to recruitment agencies that serve the NHS.
HMRC alleges that Ducas failed to pay Employer’s National Insurance Contributions (NIC) for approximately 30,000 workers, resulting in a £171 million tax fraud.
HMRC claims that while Ducas received workers’ gross pay and was responsible for making deductions, it instead paid workers via limited companies, circumventing tax and NIC obligations.
Although no final judgment has been made, the assets of the companies involved have now been frozen, and the allegations raise serious concerns about how contractors have been paid, and if/how they will be paid going forwards.
You can read the case for the freezing injunction here: www.bailii.org/ew/cases/EWHC/Ch/2024/3132.html
What Are the Rules About Deductions?
Under the UK’s off-payroll working rules – also known as IR35 – temporary workers/contractors must pay Income Tax and National Insurance broadly equivalent to that of employees.
The rules apply when:
- A worker provides services to a client through their own intermediary eg a limited company
- The nature of their work would classify them as an employee if their services were provided directly to the client
Key responsibility for determining IR35 status of a worker depends on the client:
- Public sector: The client determines the worker’s employment status
- Private/voluntary sectors: Larger clients hold this responsibility; small businesses are exempt
Most healthcare roles – such as healthcare assistants and nurses – are unlikely to pass the IR35 test for self-employment as they are subject to Supervision, Direction, and Control (SDC) in their assignments.
In this scenario, getting paid through a limited company, and not paying Income Tax and National Insurance, is illegal.
What is a Status Determination Statement (SDS)?
When a contractor operates via a limited company, the end client should produce a Status Determination Statement (SDS) and give it to the recruitment agency for each assignment.
If your temp doesn’t have an SDS for their current assignment, request one immediately from the end client.
An SDS clarifies whether an assignment is:
- Outside IR35: Self-employed status, allowing gross payments to a limited company
- Inside IR35: Employee status, requiring tax and NIC deductions
If an SDS shows an assignment is inside IR35, contractors should reassess the benefits of using a limited company compared to an Umbrella service.
If no SDS has been provided, the assumption is always that the assignment is inside IR35.
Why Using an Umbrella Service Makes Sense
If an assignment falls inside IR35, getting paid via a limited company is generally not beneficial:
- No statutory benefits like sick pay, parental leave or national minimum wage
- No holiday pay or employer pension contributions
- High cost of accountants
- Lots more administration, such as company tax returns and self-assessments
- No ability to claim business expenses
- Potentially take home less money for the work undertaken!
Switching to a compliant Umbrella payroll service will ensure all necessary tax and NI deductions are made, and the worker will receive the statutory employee benefits and protections they deserve.
Why Choose Exceed Contracting?
Exceed Contracting offers a fully compliant PAYE umbrella solution tailored to the needs of contract workers.
Benefits of joining Exceed Contracting:
- Full HMRC compliance, backed by Professional Passport and PAYE Pass insurances
- Named contact for personalised support
- Real-time pay updates and unmatched customer service
- Access to referral bonuses, retailer discounts and online learning academy
- Statutory benefits, including sick pay and parental leave
- Advanced or accrued holiday pay
- One employer/tax code for multiple agency assignments
Act Now to Protect Your Temps from the Asset Freeze!
Exceed Contracting can help if your temps have been impacted by the Maxipay/Ducas asset freeze.
If you suspect your temps have been paid incorrectly or they need to switch to a compliant payment method, refer to Exceed Contracting today:
