Time to ‘name and shame’ non-compliant umbrellas?

Time to ‘name and shame’ non-compliant umbrellas?

03/10/2022 - 09:43

The new CEO of the Freelancer and Contractor Services Association (FCSA) hinted that his organisation could start ‘naming and shaming’ non-compliant umbrella companies in a bid to boost standards.

Chris Bryce, who joined umbrella trade body FCSA from IPSE said there is “a possibility” they could call out umbrella companies that ignore compliant practices and don’t uphold tax obligations.

Speaking to Recruiter, he said: “I don’t see why FCSA wouldn’t be able to do that, subject to legal advice. We have to be cautious in that regard.”

“Having said that, where we have conclusive evidence of bad actors, I see no reason why we shouldn’t publish the evidence and ‘name and shame’.”

Following the implementation of stricter IR35 rules - which makes it harder for contractors to work through a limited company - there is growing concern about the number of ‘bad actors’ in the umbrella market.

Some firms have been accused of not respecting worker rights and obligations.

There’s also concerns about tax avoidance schemes masquerading as umbrella companies and ‘umbrella clones’ duping customers.

More recently, some umbrella companies have been targeted by hackers, which has resulted in system outages. Chris Bryce said all umbrella companies need to be “more vigilant” about cyber security.

In February, HMRC, the Treasury and the Department for Business Energy and Industrial Strategy wrapped up a three-month consultation on the future of the umbrella company market. It’s thought this consultation could lead to more regulation of umbrella companies.

How to find a good umbrella company

The best way to make sure you get a reliable, legally-compliant umbrella company is to check an umbrella’s accreditations. An accreditation from the FCSA or ASPCo is a hallmark of a trustworthy umbrella.

Umbrella.co.uk holds both FCSA accreditation and ASPCo Umbrella Company Trusted Partner status.

Miles Grady said: “Workers need protecting from rogue umbrella operators. If umbrella company regulation fails then naming and shaming so-called bad actors could be a valuable back-up plan.

“Our ‘golden rule’ for contractors is ‘if it sounds too good to be true - it probably is’.”

For more information, speak to a member of the Umbrella.co.uk team. Call: 0800 121 6513.