Call for evidence on the Umbrella Sector

• Government has published a call for evidence on the umbrella company market to ‘ensure it has an up-to-date and well-informed view of how the market operates.’
• The call for evidence invites views from stakeholders on the role that umbrella companies play in the labour market, and how they interact with the tax and employment rights systems.
• It sets out the concerns that have been raised by some stakeholders, as well as government action already taken to tackle tax non-compliance and improve protection for workers. The call for evidence also seeks to gather information on the benefits of umbrella companies in the temporary labour market to consider the motivation for using them.
• The government is looking to hear from both organisations and individuals who are employed by umbrella companies to better understand the sector and how it is continuing to evolve.
• It reminds us that the government has already committed to regulating umbrella companies through a new single enforcement body.
• The Government intend to bring umbrella companies into scope of the framework that regulated employment agencies and employment businesses, enforced by the Employment Agency Standards Inspectorate.
• Then, the Government would set out, through regulations, the minimum legislative requirements umbrella companies would be expected to comply with.
• The Government would like to test whether, and to what extent, the introduction of the Key Information Document has helped workers understand what their take home pay is likely to be.
• The Government would like views about the reasons for using “joint-employment” contracts and how widespread this practice is.
• The call for evidence closes on 11:45pm on 22 February 2022. To view the call for evidence document and the lists of questions being asked, click here.

Aspire Comment:

Recently we have seen increased activity by HMRC, including the publication of various documents and tools to educate supply chains and workers of potential risks, however, despite this, it would appear that regulation of umbrella companies remains some way off.   If you require any guidance, get in touch with one of our team on 0121 445 6178 or send us an email at enquire@aspirepartnership.co.uk.