What is happening?
The Government has issued a call for evidence for the Umbrella Company Market. The call for evidence runs from 30 November 2021 to 22 February 2022 (a nice, easy date to remember).
You can read the full document here: https://www.gov.uk/government/consultations/call-for-evidence-umbrella-company-market
Highlights of the Umbrella Company Market Report
Through ten points under its rationale for the Umbrella Company Market Call for Evidence, the Government extols the benefits of the Umbrella Company Market but highlights 'concerns regarding non-compliance' and a 'lack of transparency'. Tax evasion and disguised remuneration are highlighted as specific concerns. The upshot is that Umbrella Payroll Companies are being told to take their responsibilities seriously to ensure high standards of tax and employment rights compliance and suitable protection for all workers.
The report takes aim at 'Non-compliant umbrella companies' that 'are able to reduce their costs and can consequently offer services at a lower price, giving them a competitive advantage over businesses who do the right thing'.
The document also acknowledges that 'there is still no means by which umbrella companies themselves are regulated' and makes it clear that this will change in what is referred to as a 'multistage process'. The document goes on to say that 'the next stage to do that will be to bring umbrella companies into [the] scope of the framework that regulates employment agencies and employment businesses…this will require primary legislation'.
To form the basis of the call for evidence, two sets of detailed questions are provided;
Sixteen questions for employment businesses and end clients about their use of umbrella companies.
Seventeenth questions for work-seekers about their experience of working through umbrella companies.
What could this mean for your Umbrella Payroll Company?
- Umbrella Payroll Companies are under the spotlight again. Even if you are confident of your processes a review wouldn't hurt
- Compliance is key. Having robust, flexible processes in place to support your compliant practices is essential
- Reputable companies that are determined to take responsibility and work within Government guidelines have nothing to worry about
- Accreditation with an industry body doesn’t necessarily guarantee compliance
How could your Umbrella Payroll Software be affected?
Take steps now to ensure that your Umbrella Payroll Software isn’t the weak link in the chain.
Using robust, flexible umbrella payroll software that can be adapted to meet the changing needs of the industry is key. Poor umbrella payroll software could result in inadvertent failure to meet obligations toward your workers. This article can help you determine whether your umbrella payroll software is up to the task.
How can you can contribute to the Umbrella Company Market consultation?
By email: [email protected]
Umbrella Company Call for Evidence,
Personal Tax Team,
1 Horse Guards Road,
The closing date for submissions is 22 February 2022.
The information contained in this article isn’t intended as legal advice and shouldn’t be taken as such. If you have specific concerns or questions relating to legal obligations please contact a qualified legal advisor.