Last year, the government opened a call for evidence into umbrella companies, and they want the entire supply chain to contribute. Whether you’re a contractor or freelancer or represent an agency or end-client, please participate and help the government better understand the marketplace. It looks like regulations will be arriving shortly, and you can help ensure they’re in every stakeholder’s best interests. Keep reading to find out more about the government’s call for evidence regarding umbrella companies and how you can contribute now – before it’s too late.
Why has the government opened a consultation into umbrella companies?
The umbrella company marketplace has been in the news recently for the wrong reasons. While compliant umbrellas offer a helpful and lawful payroll service, unscrupulous umbrella companies have tainted the industry’s reputation. For example, last year, mini umbrella companies came to light – unethical schemes where recruiters were profiting by making non-compliant candidate referrals to non-established payroll providers. There has also been a holiday pay scandal where an accredited umbrella company was accused of unlawfully retaining the accrued holiday pay of its workers.
More recently than the above, the umbrella sector has been bombarded by cyber-attacks, and these have had a massive impact on the operations of some of the UK’s most well-known umbrella companies. For example, impacted umbrella companies have included Giant Pay and Parasol.
With the above in mind, numerous stakeholders have campaigned to the government, asking for regulations to be introduced. As things stand, the Freelancer and Contractor Services Association (FCSA) and Professional Passport self-regulate the sector. They provide highly-respected accreditations to umbrella companies (and other payroll providers) dedicated to providing compliant service. However, despite their best efforts, non-compliant umbrella companies continue to prey on vulnerable temporary workers, and tax avoidance schemes still advertise their services to UK workers.
While the government’s umbrella company call for evidence is unquestionably a step close to regulations being introduced into he sector, there are still many questions that stakeholders would like answering. When will regulations be introduced into the umbrella company marketplace? What protection will be given to temporary workers? Will punishments for non-compliant payroll providers be more severe? Is the government going to be fairer when handling cases of temporary workers using non-compliant payroll providers against their knowledge? Will facilitators of tax avoidance be given stricter punishments? Are more barriers to entry going to be introduced for new payroll companies? The list is endless!
Why should you participate with the umbrella company call for evidence?
The government’s call for evidence into umbrella companies is your chance to have your voice heard. You may have had a terrible time with an umbrella company, and you want to share it with the government – to ensure that nobody else has a similar experience. Or, on the other hand, you might be pro-umbrella companies and want to share your reasons why you value them.
Whether you’re anti-umbrella companies, support them, or don’t care – this call for evidence is your opportunity to share your opinion with the government so that hopefully, the industry is better for all parties in the future. The government doesn’t open consultations very often – so this is a rare opportunity you won’t want to let slip by.
When does the consultation close?
Stakeholders within the umbrella company sector have until 11:45 PM on Tuesday 22nd February 2022 to participate.
How can you participate with the government’s call for evidence into umbrella companies?
Taking part with the consultation is really straightforward and shouldn’t take you long.
If you would prefer to send your responses via post, please send them to: Umbrella Company Call for Evidence, Personal Tax Team, HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ.
We recommend you do this well before the deadline to ensure your comments and feedback is taken into account.
There are online surveys targeted at specific members of the supply chain.
- Employment businesses and end-clients – please click here to complete an online survey.
- Temporary workers (those who have worked through an umbrella, or have considered it in the past) – please click here to complete an online survey.
If you represent an umbrella company (you work for an umbrella company), you are asked to email your thoughts to firstname.lastname@example.org.
Top 10 umbrella companies
If you are currently using an umbrella company you’re not happy with, or you’re seeking a PAYE payroll provider for the first time – we have something that will help. Our team has collated a list of our top 10 umbrella companies, and we recommend you check it out. All of the top 10 are accredited by either the FCSA or Professional Passport. It’s also worth noting that some have special offers at the moment. Remember, if you’re unhappy with your current provider, switching umbrella companies is easier than you might think.
The team at UCHQ recently caught up with Chris Bryce – the new CEO at the FCSA. Please read our article to see what we discussed about his new role, the umbrella company sector and umbrella company regulations: An exclusive interview with Chris Bryce – the new CEO at the FCSA.