Industry experts urge government to regulate umbrella market

Umbrella companies are a popular way for organisations to engage temporary workers, given the IR35 rules do not apply to umbrella workers, as they are employees of the umbrella.


However, according to a recent policy proposal put forward by former senior policy adviser to the Treasury, Rebecca Seeley Harris, and founder of James Poyser, there is “mounting evidence of malpractice” and “widespread non-compliance of both tax and employment law”, in the supply chain, which breach workers’ rights.


It highlights some of the malpractices that have occurred, which include, withholding holiday pay, incorrect payments of Employers’ national insurance contributions, and abuse of the employment allowance tax relief.


In fact, the document states that a “conservative estimate” of the value of unpaid holiday pay to umbrella company workers in 2016 was at least £1.8 billion. This amounts to an additional £300 million that would have been collected by the taxman through Income Tax.

If any Outside Spy members believe they have been affected by the malpractices outlined above please contact us via the website.