Umbrella regulation in “precarious position” after tax admin day

Government proposals to enact a due diligence regime for the umbrella company market are in a “precarious position” unless government shows “urgency” to develop them, the contractor trade body warned today.

Updating industry on the progress of a consultation to tackle non-compliance in the umbrella companies market, government said that it was ‘minded to introduce a due diligence requirement to drive out bad actors from labour supply chains’.

It said it ‘will continue to engage with the recruitment industry and other key stakeholders on the detail of a statutory due diligence regime for businesses that use umbrella companies…’

Responding to the announcement, IPSE (the Association of Independent Professionals and the Self-Employed) expressed its support but warned that a lack of parliamentary time before an election puts the plans in a “precarious position”.

Andy Chamberlain, IPSE’s policy director, said: “It’s great that government is minded to do something about non-compliance in the umbrella company sector. Contractors want to see a regulated umbrella sector, and we’re ready to work with government to chalk up how a due diligence requirement could work.

“But we need some urgency from government. It’s been almost a year since it began consulting on the proposals – ones that should have been in place before the off-payroll working rules. With an election on the horizon, the plans are in a precarious position and risk being delayed even further.”