National Housing Federation

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#PlanForHousing opinion piece series

Autumn Budget and Spending Review submission 2024

Government support needed to build 300,000 new homes. Research by Savills, commissioned by the NHF, examines how the government can deliver on its 1.5 million new homes target over this Parliament and the likelihood of the housing market delivering 300,000 homes per year.

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Government to miss 1.5m homes target by half a million homes without funding and policy intervention, industry bodies warn. New report by Savills, commissioned by NHF, warns that without significant government support, the UK will fall short of its 1.5 million new homes target by nearly 500,000 homes. The report highlights the need for social housebuilding and support for first-time buyers to meet housing demands.

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Government sends letter to local authorities in support for housing for veterans, domestic abuse survivors and young care leavers. The Ministry for Housing, Communities and Local Government has sent a letter to local authorities setting out their support for Armed Forces communities, veterans, domestic abuse survivors and young care leavers.

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Warm Homes: Social Housing Fund - apply now. Applications for the former Social Housing Decarbonisation Fund close on 25 November 2024. Members are encouraged to review the guidance and make an application ASAP.

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The Renters' Rights Bill. On 11 September 2024, the government published the Renters Rights Bill. This Bill aims to make sure private renters have access to a secure and decent home, but it also has implications for social housing tenancies.

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My Home Contents Insurance. Affordable and flexible scheme designed to protect your tenants.

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Widening the availability of section 71 registered social landlord relief. HMRC has updated its guidance to cover a number of scenarios around section 71.

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The new Chancellor, Jeremy Hunt, announced that the off payroll working (IR35) rules introduced from April 2021 (6 April 2017 for the public sector) are to continue unchanged in a reversal of the proposed repeal announced by the previous Chancellor, Kwasi Kwarteng. On the basis that the rules won’t change, now is a good time to check the level of your compliance with IR35 obligations. Particularly as the HMRC ‘light touch’ approach to penalties for inaccuracies that were not deliberate ended on 5 April 2022, and HMRC is stepping up its compliance activity. Recap on IR35 obligations Under the rules introduced from 6 April 2021, medium or large-sized organisations in the private and third sectors (excluding those that are “wholly overseas”) have the responsibility for deciding whether arrangements with third party intermediaries such as Personal Service Companies (PSC) do in fact represent a disguised employment. Where an arrangement is deemed to be ‘inside IR35’ on the basis that it is a disguised employment, then the fee payer is responsible for operating PAYE/NIC on payments, including employer NIC, and where applicable the apprenticeship levy. The client using the services of the worker operating via an intermediary such as a PSC is also required to meet other obligations. For example, once the client has applied reasonable care and has determined whether the off payroll working rules apply to an engagement, it is required to communicate that decision in the form of a Status Determination Statement (SDS). It is also necessary for the client using the services to offer a status disagreement process to deal with any disputes regarding the SDS and respond within 45 days. Where the client is defined as a small business by the Companies Act 2006, responsibility for assessing the arrangements, and applying IR35 where necessary, will remain with the workers intermediary such as the PSC. Common issues and misunderstandings on off payroll working within the social housing sector Now that the IR35 intermediaries rules have been in place for over 18 months, our tax advisers, RSM, are seeing some recurring issues and misunderstandings within the sector around the rules, including: Obligations with regard to PSC versus obligations with regard to self-employed individuals Whilst employment status tests for workers providing services to a client via their own intermediary such as a PSC are the same as status tests for self-employed workers who are not operating via a PSC, the obligations that you have in relation to each differ and we often see confusion around this. As above, obligations, and risk, in relation to the use of PSCs by a medium or large client apply from 6 April 2021 only, whereas your obligation to determine whether a self-employed worker is genuinely self-employed for tax purposes have been in place for many years under separate rules. Where you are using the services of a PSC, then you are required to confirm your status assessment in a formal SDS and offer a status disagreement process. A formal SDS does not need to be issued when a self-employed individual is working for you, although ou must still assess whether or not they are genuinely self-employed, and you should keep a record of this. If the status of a self-employed worker who is not operating via a PSC is assessed and it is determined that they have the features of employment, then they must be treated as an actual employee for both PAYE/NIC and employment rights purposes. Where a PSC worker is determined as ‘inside IR35’ then they are treated as a ‘deemed employee’ for PAYE/NIC purposes only and do not automatically have employee status for rights such as pension auto-enrolment. Employment status and the Construction Industry Scheme (CIS) Many housing associations engage with off payroll sub-contractors who are paid via the CIS. It is important to emphasise that obligations in relation to assessing employment status and IR35 must be undertaken for sub-contractors as they are for any off-payroll worker. It is only once you have determined that the off-payroll worker is outside IR35/genuinely self employed that you can make payments to them under the CIS. In this respect it is often overlooked that each monthly CIS contractor return requires a declaration to be completed confirming that the employment status of each individual included on the CIS return has been considered and it has been confirmed that they are not in fact an employee or deemed employee. Obligations where workers are sourced via a recruitment agency Much like many other organisations, housing associations often source temporary workers via third parties such as recruitment agencies. In this situation payments are made to the recruitment agency, but it is important to obtain confirmation from the agency on a worker-by-worker basis as to whether or not the worker is subject to PAYE/NIC by the agency. If the recruitment agency is contracting with a worker operating via an intermediary such as a PSC and onwardly providing them, then the housing association as the client (i.e the end user of the worker’s services) has IR35 obligations, unless it is a small business as defined by the Companies Act 2006. Importantly, the housing association must consider the status of the worker and issue a SDS to both the agency that it contracted with and the worker. Failure to meet this obligation can result in the housing association becoming liable for any PAYE/NIC due. Due diligence on the labour supply chain is also important because, outside of IR35, there can be other tax and/or reputational risks if the worker is engaged by a party in the labour supply chain who is not correctly operating PAYE. For example, where the worker is working for a client in the UK, but is engaged by a party in the labour supply chain based outside of the UK who is not operating In summary, for now at least, the off payroll working rules are here to stay and HMRC are stepping up their compliance activity following the end of the ‘light touch’ year for penalties. All housing associations should periodically review their compliance in the high-profile area of employment status. Our tax advisors RSM work with many housing associations and other organisations with regard to their obligations under the off payroll working rules and would be pleased to help with any queries. For an initial discussion please get in touch with David Williams-Richardson. The Chancellor announced that the off payroll working rules introduced from April 2021 are to continue. Now is a good time to check the level of your compliance with IR35 obligations.

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How to support a Partial Exemption Special Method application to HMRC. Discussions between the NHF and HMRC has highlighted some ways in which a housing association can support HMRC in reviewing a PESM application.

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Events

26 Nov 2024

London

Leaseholder and Tenant Service Charges Conference 2024

21 Jan 2025

London

Comms & Influencing in Housing Conference & Exhibition 2025

13 Feb 2025

London

Board Leadership Conference and Exhibition 2025

25 Feb 2025

London

Customer Experience and Resident Engagement Conference 2025

Empowering residents through community involvement with ForHousing

In this blog, Toria Buzza, Head of Communities and Tenant Involvement at ForHousing, reflects on their resident engagement work since adopting the Together with Tenants Charter.

Affordable rural homes: a pathway to revitalising our countryside

Martin Collett explains the crisis facing rural housing in England and the importance of ensuring everyone in rural communities can access a decent, affordable home.

How more homes for later living benefit us all

House building is rightly a priority of the government, and with more than 10 million people in England aged 65 and over, socially rented and affordable older people’s housing needs to be considered as a part of the mainstream housing offer.

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Making every contact count

Latest

#PlanForHousing opinion piece series

Autumn Budget and Spending Review submission 2024

Events

Blogs

Empowering residents through community involvement with ForHousing

Affordable rural homes: a pathway to revitalising our countryside

How more homes for later living benefit us all