Government releases umbrella company compliance consultation

Last week, the government published its open consultation on the umbrella sector looking at regulation and non-compliance within the market.

Commenting on the ‘Tackling non-compliance in the umbrella company market’ publication, Neil Carberry, REC Chief Executive, said, “Regulation of umbrella companies is long overdue. Today’s announcement represents progress that is crucial to a sustainable temporary work market.

“Unlike recruitment firms, umbrellas currently operate without a specific regulatory framework, leaving workers and employment businesses at risk of non-compliance on worker rights and tax.

“While there are voluntary standards and audits in place for these firms, a strong legislative base is necessary. This consultation is a step towards that.”

Nail added, “The use of a simpler definition of umbrellas is helpful because it will help everyone understand the rules and hold umbrella companies accountable.

“We will talk to our members about individual proposals before responding formally, but we already know that we need progress on the creation of a suitably resourced Single Enforcement Body (SEB) to make sure any regulation is complied with.

“Umbrella companies are prone to evolving quickly and have complex structures, so any rules will need a strong enforcement framework. This can’t be bodged by handing responsibility to someone else in the supply chain.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.