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HMRC internal manual

Labour Provider Guidance

From
HM Revenue & Customs
Updated
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Yield and Measures: Future Revenue Benefit

Behavioural Changes as a result of LM interventions can be scored either as Future Revenue Benefit (FRB) or Revenue Loss Prevented (RLP) LPOG10400

Main scenarios where Future Revenue Benefit (FRB) can be claimed:

  • A non-compliant LP becomes compliant.
  • A non-compliant LP is removed and the workforce taken on by user.
  • A non-compliant LP is removed and the replacement LP is compliant

Direct tax - previously Intervention Yield

This relates to all direct taxes and is a measurement of the actual increase in tax paid. The actual amount will usually be scored for two years (unless there is evidence that suggests that the FRB will not continue for the full two years). Compute the actual change over the four months immediately following the intervention, then multiply by six to get the effect over 24 months.

Indirect tax - previously Displacement Yield

Where as a result of a LM intervention supplies made by a non-compliant labour provider begin to be made by a compliant business, and the overall VAT yield has increased, FRB can be scored for a maximum of two years (unless there is evidence that suggests that the FRB will not continue for the full two years). Compute the actual change over the three months immediately following the intervention, then multiply by eight to get the effect over 24 months.

If you are unable to forecast an FRB value in an Indirect Tax case as you have no historical information to aid the calculation, caseworkers should revert to the fallback position of calculating FRB as £44,500 per quarter, subject to the de minimis limit of £2,000 per month.

Examples of range of yield claims for LM Interventions LPOG10500.

Recording FRB Yield

The main guidance on FRB is found at COG18200 

The attached template should be used to for recording how FRB claims have been calculated - these must be authorised by LM Managers before any yield is claimed. In addition any claim over £100K must have its calculation countersigned by a check officer.

Particular care should be taken to ensure that the correct baseline is used to calculate the FRB i.e. the 4 months for Direct Tax and the 3 months for Indirect Tax immediately following the intervention. A different period must not be used where the effect of this increases the FRB claim.

The attached LM Managers checklist template must also be completed before FRB is claimed.

Once completed both templates must be filed in EF and Caseflow.

FRB_Template (Word 34KB)

LM Managers FRB checklist (Word 30KB)

Results are recorded on Caseflow - guidance can be found under the Compliance Operational Guidance (COG) under Caseflow 2