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Is it time for Regulation for Umbrella companies?

Is it time for Regulation for Umbrella companies?

 

It’s been well over a year now since HMRC repositioned the IR35 rules to Public sector off-payroll workers and the impacts of this do not make happy reading. Many of the end user employers are opting for blanket “inside IR35” decisions regardless of the impact on consequences for the workers and some ‘questionable’ accountancy practises are being adopted. Coupled with well-meaning, though possibly naïve executives, organisations at every stage in the supply chain are opening themselves to prosecution through the Criminal Finance Act (2017). It speaks volumes when major public-sector bodies themselves are either confused by the legislation or so inconvenienced by it that they are seeking creative ways to get around it.

 

With the possibility of the same IR35 amendments being implemented in the private sector as early as April ’19, the situation will surely only become even more chaotic and a very valid question is, “why does this industry remain unregulated?”.

At IF Workforce Group we have been monitoring the UK off-payroll market for some time from the side-lines. There exists a myriad of employment, tax and payroll regulations and they are constantly under review, both in terms of their intent and their interpretation We feel that the Government cannot allow this to continue as it is tens of thousands of ordinary workers who are feeling the pain or are unknowingly exposed to serious financial penalties.

 

As is frequently the case, a ‘one size fits all’ solution is not going to work. There is a world of difference between a Deliveroo or Uber worker at the lower end of the gig economy and a senior IT or Finance professional moving from project to project. What’s more, the legislation seems to be trying to cover both tax evasion and protect workers’ rights – that’s a very broad brush! Currently, no one knows who is right, who to trust and who they can speak with for confirmation and clarity on how things should be managed and the impact of this is far reaching. As ever in times of uncertainty, unscrupulous firms are stepping in to take advantage. The recent Supreme Court ruling against Pimlico Plumbers demonstrates the complexity of worker-status and the potential costs of getting it wrong!

The sooner regulation comes, the better. If nothing else it should remove some of the shadier providers from the supply chain and give clearer guidance on what is required from everyone that remains.

 

We feel that big changes are on the horizon, which is why, at a time when many providers will be thinking of exiting, we are preparing to enter the UK “Umbrella” market. We will lobby for, and welcome, regulation but in the meantime, and to provide our clients and/or workers with peace of mind, we will be obtaining FCSA accreditation. Theirs is the only accreditation program independently audited with details on the successful applicants lodged with HMRC, and it’s this transparency that aligns with our own corporate values.

We hope our solution will provide clarity, fairness, value and compliance and protection for the entire supply chain and we look forward to engaging with employers, agencies, intermediaries and individual workers in the weeks, months and years ahead. Full details can be found here.

 

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Ray WalkerFounder and
Managing Director