How compliant are umbrella companies?
‘All Umbrella companies are the same – they’re unscrupulous, their ethics are questionable at best, they are no better than loan sharks and they’ll do all they can to bend the rules’. Sound familiar?
It is a horrible thing to concede, but this is indeed true for a small minority of companies whose bad practice and non-compliance sadly tarnishes the rest of the industry. However, things may be about to change.
One Click Umbrella has been a long-serving member of an increasingly influential lobbying group – All Umbrella Companies are Equal. The group, made up of over 30 member organisations including ourselves, is appealing to all umbrella organisations throughout the UK to sign up to a Charter (á la a code of conduct) which guarantees that their working practices are fully compliant with existing HMRC requirements.
In doing so, each organisation will, by association demonstrate their commitment to being honest and transparent with both their recruitment agency partners and their contract workers alike. Which is good news for the industry, but more important for contractors and recruiters.
Indeed, the world of contract working can often be a veritable quagmire. With the UK having one of the most complex (not to mention ever-changing) employment legislation, it is hardly surprising that there is much confusion surrounding take home pay, compliance and future tax liabilities. This is precisely where umbrella companies should be earning their keep, yet far too many are failing to do so.
In partnership with all of our fellow lobbying group members, we are seeking to change this.
For our part, we have actively been campaigning to engage with the UK’s trade unions as well as lobbying our local Members of Parliament via a series of open letters. In addition, just last month we were granted a meeting with representatives from the Treasury Department to advance our case.
But it doesn’t end there. The legislation for compliance is already in place – we just need the unions to get on board and for ALL umbrella partners to commit to the proposed Charter and take a united stance against those umbrella companies who continue to exploit certain loopholes which exist. An example of which includes instances where some off-shore umbrellas register their contractors as being “employed” overseas in a bid to avoid paying UK tax and National Insurance Contributions – this is not only unethical, it is also illegal.
We shall continue to campaign against non-compliant practices. We’re not seeking to become seen as trailblazers or do-gooders – we simply want to protect our clients, your clients, and to do our bit to restore the reputation of our industry by ensuring that every company operating in our space is doing so in the most ethical, honest and transparent way.