A considerable amount of umbrella companies have been named by HMRC for being non-compliant following updates on payslip guidance for umbrella company contractors and recent allegations of ‘salary skimming’.
On the same day as HMRC’s refresh, business officials released an entirely new guide to help agency workers paid through umbrella companies understand Key Information Documents.
Employment businesses have been required to provide key information documents (KID) to agency workers when they register since 6th April 2020, before work-finding services for them are undertaken.
The regulation, by the business, energy and industrial strategy department, covers umbrella contractors too, although officials think these workers could do with the coverage being clarified.
A KID should contain a variety of pay related details, including, the minimum rate of pay the agency worker can expect, who should pay them, how often and if there’s any deductions needed, but as both IWORK’s Julia Kermode and Champion Contractors’ Chris Bloor pointed out to their online followers, the new BEIS guidance is “specifically” for umbrella company users.
“I think it’s fair to say the last couple of weeks have not been great for the umbrella industry” says WTT Consulting’s Tom Wallace. “Umbrellas have been removed from the FCSA, claims of impropriety continue to circulate, and more non-compliant umbrellas have been named by HMRC.”
The uproar is such that agencies are reassessing their options – on top of outright removing umbrella companies from PSLs if they suspect improper actions or perceive others to.
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