UK government proposes legislation to regulate umbrella companies
However, before it moves to regulate umbrella companies, the government would need define them, firstly using primary legislation and giving ministers the powers to make regulations containing requirements for umbrella companies. Then it would need to consult after the definition had become law on the specific requirements to be placed on umbrella companies before implementing them, the document said.
"A number of workers explained that they had previously worked through [personal service companies] but that end clients had moved away from engaging people in this way, citing the reforms to the off-payroll working rules, and would only offer roles through umbrella companies," it said. Julia Kermode, CEO of umbrella company compliance specialist PayePass, said the government's proposals were"a mixed bag."
"There are some valid proposals, like ensuring proper due diligence is carried out on umbrella companies and holding the supply chain accountable if they fail to do so. But at the same time, the government is putting forward ideas which need real work and threaten how the wider recruitment sector operates," she said. ®
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