Contractors argue umbrella companies need improved regulation, not outright ban theregister.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from theregister.com Daily Mail and Mail on Sunday newspapers.
Copy
UK government proposals to create a workers watchdog have been slammed by campaigners for not adequately covering umbrella companies, some of which have been accused of sharp practices as the IR35 off-payroll tax revamp expands their usage among contractors.
This week the Department for Business, Energy and Industrial Strategy said it would launch a new organisation to tackle modern slavery, enforce the minimum wage and protect agency workers, work currently spread across three different regulatory bodies.
The single enforcement unit will take a “one-stop shop” approach to improve administration through better co-ordination and pooling intelligence, according to a BEIS statement.
UK gov finally proposes to police rogue umbrella companies but leaves questions unanswered theregister.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from theregister.com Daily Mail and Mail on Sunday newspapers.
MPs ignore calls for regulation to help contractors
Lindsay Clark Tue 25 May 2021 // 14:30 UTC Share
Copy
MPs in the UK’s Parliament decided not to select amendments to the 2021 Finance Bill designed to offer contractors protection from rogue umbrella companies accused of skimming off pay and holding back holiday pay.
Last week Conservative MPs David Davis, Sir Iain Duncan Smith, and Andrew Rosindell proposed changes to the UK s 2021 Finance Bill urging the government to introduce legislation to clamp down on intermediary employment firms, which campaigners say have mushroomed as temp agencies and end-user businesses avoid directly hiring contractors judged to fall within the IR35 off-payroll working tax law, introduced this year.
Companies are being urged to get a better handle on their supply chain following guidance issued by HMRC on mini-umbrella company fraud, however market participants have criticised the body’s approach.
“HMRC is pushing out the moral imperative saying big companies have a moral obligation to make sure that everything that sits below is fair and transparent,” says Matthew Sharp, tax disputes director at Fieldfisher.
“It’s very interesting the way that HMRC’s press team have positioned this as a problem with umbrella companies,” he says. “There are a lot of very reputable umbrella companies out there, who are doing exactly what they mean to be doing. The problem isn’t with umbrella companies, it’s with the rogue operators who are abusing things like employment allowance for national insurance purposes.”