Umbrella companies face regulation changes…

Limited Company, News, Tax,

It was announced as part of TAM Day recently that there will be a ‘call for evidence’ by the Government around Umbrella companies.

The umbrella company business model first became popular some 20 years ago. The basic premise is to supply temporary services to a client, whilst minimising the employment burden. The desired benefit is a dynamic and flexible labour market, but workers can be exploited and there can be tax challenges.

In recent years, there have been many reports of umbrella companies failing to provide employment rights such as holiday pay and for there to be errors in the payment of tax and National Insurance.

HMRC has evidence of different examples of this tax non-compliance including tax evasion, while previous consultations have sought to address related issues.

The aim of the ‘call for evidence’ is for the Government to gain an up to date understanding of the market and its continued evolution. There are a number of questions around the role that umbrella companies play and how they support the labour market. However, respondents can add their own thoughts, rather than be restricted to answering the questions asked.

You can find further information about this call for evidence here.


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