Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

IR35TaxLatest News

Regulate umbrella companies to protect workers’ rights, ministers told

by Ashleigh Webber 17 May 2021
by Ashleigh Webber 17 May 2021 Shutterstock
Shutterstock

The government must regulate umbrella companies to prevent workers from losing out on rights such as holiday pay and being asked to ‘opt out’ of protections, ministers have been urged.

A draft policy submitted to financial secretary to HM Treasury Jesse Norman and business minister Paul Scully calls for government intervention to stop organisations from abusing the use of umbrella companies and to protect workers’ rights.

IR35

Thousands of mini umbrella companies abusing tax system

Gary Lineker faces IR35 tax accusation

IR35 changes take effect in private sector

The document – compiled by Rebecca Seeley Harris, chair of the Employment Status Forum and and James Poyser, CEO of inniAccounts and founder of advice website offpayroll.org.uk – suggests that the lack of regulation has resulted in holiday pay being withheld, incorrect payments of employers’ national insurance contributions, and the abuse of the employment allowance tax relief.

The use of tax avoidance schemes, including the use of “mini umbrellas companies”, are estimated to cost workers and HM Revenue & Customs around £1bn annually. It is estimated that 500 “self-regulated” umbrella companies are managing the payroll for 600,000 umbrella company employees.

Last week, the BBC found that 48,000 “mini umbrella” companies have been created over the past five years to reduce recruitment agencies’ tax and national insurance liabilities

According to inniAccounts, 71% of workers deemed “inside of IR35″ were moved under an umbrella company ahead of the off-payroll working rules’ extension into the private sector in April.

Seeley Harris said: “It is paramount that the regulation of this industry is expedited because of the rise in the use of umbrella companies as a result of both the coronavirus pandemic and the off-payroll working rules forcing people through non-compliant umbrellas.

“The abuses in the labour market supply chain, as a whole, need attention and it may be that the government can look at the bigger picture, including legislation such as IR35 and the off-payroll reforms, because it drives immoral behaviour.

“The issues concerning employment status in the UK are the driving force behind the use of umbrella companies – it is simply irresponsible to let it continue unregulated.”

Poyser said: “The breadth and scale of the stories of malpractice, scams and skimming are distressing and deplorable. It’s clear that ‘accreditation’ and self-regulation of this market is simply not working, and instead has created cartel-like behaviours and unethical practices.

“We have witnessed payslips that don’t reconcile, deductions taken from workers but not paid to HMRC, holiday pay being unfairly pocketed, workers forced to use a single umbrella company with artificially inflated fees and agree to ‘opt-out’ of worker protections.”

The draft policy suggests that the government should:

  • Appoint a director of labour market enforcement as a matter of urgency. The post is currently vacant, after Matthew Taylor’s contract came to an end earlier this year
  • Identify whether to form a single enforcement body or to expand the remit of the Employment Agency Standards Inspectorate to oversee the regulation
  • Consult on whether the existing legislation (Conduct of Employment Agencies and Employment Businesses Regulations 2003) is appropriate to regulate umbrella companies
  • Establish what type of regulation is needed in the labour market to ensure compliance
  • Consider whether the umbrella companies and other intermediaries should be licensed
  • Consider whether there should be not-for-profit umbrella co-operatives, which exist in other countries
  • Ensure that any legislation also protects the rights of workers, and that there is an enforcement body that can assist in recovering holiday pay on behalf of workers.

Latest HR job opportunities on Personnel Today

Browse more human resources jobs

Ashleigh Webber
Ashleigh Webber

Ashleigh is editor at OHW+ and HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support. Prior to joining Personnel Today in 2018, she covered the road transport sector for Commercial Motor and Motor Transport magazines, touching on some of the employment and wellbeing issues experienced by those in road haulage.

previous post
Highest levels of hiring optimism for eight years
next post
Wales hopes to trial universal basic income

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

You may also like

Don’t be gloomy over social mobility in the...

24 Jun 2022

Christian awarded £22k following dismissal over religious necklace

24 Jun 2022

Movers and shakers June 2022: Lloyds, Indeed, Zoom...

24 Jun 2022

Gender pensions gap: women’s retirement pot less than...

24 Jun 2022

White-hot recruitment market? William Tincup talks to Oven-Ready...

24 Jun 2022

British Airways employees at Heathrow vote for walkouts

24 Jun 2022

Young people need more guidance over ‘green jobs’

24 Jun 2022

Government to repeal agency workers ban during strikes

23 Jun 2022

Long Covid: what tribunal’s disability ruling means for...

23 Jun 2022

Brexit remains an ‘open wound’ for EU employees...

23 Jun 2022
  • NSPCC revamps its learning strategy with child wellbeing at its heart PROMOTED | The NSPCC’s mission is to prevent abuse and neglect...Read more
  • Diversity versus inclusion: Why the difference matters PROMOTED | It’s possible for an environment to be diverse, but not inclusive...Read more
  • Five steps for organisations across the globe to become more skills-driven PROMOTED | The shift in the world of work has been felt across the globe...Read more
  • The future of workforce development PROMOTED | Northumbria University and partners share insight...Read more
  • Strathclyde Business School expands its Degree Apprenticeship offer in England PROMOTED | The University of Strathclyde is expanding its programmes...Read more
  • The Search for Talent: Six Major Employer Pitfalls PROMOTED | The Great Resignation continues unabated...Read more
  • Navigating the widening “Skills Confidence Gap” in 2022, and beyond PROMOTED | Cornerstone OnDemand conducted a global study...Read more
  • Apprenticeships are the solution to your recruitment problems PROMOTED | Apprenticeships have the pulling power...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2022

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2022 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+