A growing number of figures and organisations from the freelancer industry are calling on the government to increase regulation of umbrella companies. Scrutiny of umbrella companies has grown in recent weeks, especially in regard to issues of tax and the treatment of self-employed workers who use umbrella firms.
Rebecca Seeley Harries, chair of the Employment Status Forum, and James Poyser, CEO of inniAccounts and founder of offpayroll.org.uk, have submitted a draft policy to the government calling for more regulation.
Claiming that the current system results in misuse of tax relief, incorrect NIC payments and workers being denied holiday pay, the report calls for a new labour market enforcement director to be appointed immediately. The post has been vacant since the departure of Matthew Taylor earlier in the year.
Elsewhere the policy suggests that the government either expand the Employment Agency Standards Inspectorate’s remit to oversee umbrella company regulation or form a new enforcement body. It also calls for a consultation on the appropriateness of existing legislation and for the government to establish the kind of regulation necessary for compliance.
Rebecca Seeley Harris commented: “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.”
James Poyser added: 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.”
Author: Steven English