UCATT misunderstand Umbrella Companies

11/27/2014 - 10:18

UCATT (Union of Construction, Allied Trades and Technicians) have come in for criticism for their blanket policy of targeting umbrella companies and not understanding that it is actually the change in legislation that means many construction workers can no longer be treated as self-employed or paid through the Construction Industry Scheme (CIS).

UCATT highlight that this changed in April 2014 following the introduction of the Government’s Finance Bill. Unfortunately for many construction workers an outcome of this was that they would worse off as taxes are higher under PAYE than under CIS. This has nothing to do with Umbrella Companies as compliant umbrellas will only employ people chose to join them and who are normally better off than the other alternative of being paid PAYE by the agency that placed them.

The Government were addressing “false self employment” with the aim that all people should be taxed similarly.

Our understanding is that UCATT have failed to respond to concerns raised by Industry Bodies and businesses regarding their campaign and the harm it does to contractors who currently benefit from Umbrella Company employment.

UCATT held a number of demonstrations yesterday and have been lobbying Westminster and Labour MP’s.

UCATT, however, seem to ignore the benefits construction workers get by being employed by an umbrella company:

  • Statutory Employment Rights of a permanent employee;
  • Statutory Sick and Maternity Pay;
  • Protection from The Agency Workers Regulations;
  • Reimbursement of qualifying expenses tax free;
  • Agencies that pass on their employers National Insurance saving to the worker; and
  • Therefore the construction worker has a higher net pay than the alternative PAYE.

At Umbrella.co.uk all new umbrella company workers are given an illustration showing how their earnings compare between being paid PAYE by their agency and through Umbrella. The worker makes the choice as to which is their preference.

Umbrella are happy to provide a free illustration and the choice of working through an umbrella company. Please call 0800 121 6513.