George Osborne’s Autumn Statement made it clear that umbrella companies are to be subject to scrutiny as the treasury continues to clamp down on those suspected of tax avoidance. In his statement he referred to “so-called umbrella companies that deprive people of basic employment rights like the national minimum wage and, as a result, avoid tax.”
Whilst Mr Osborne’s statement was disappointing in that it appears to criticise all businesses in the sector, Exchequer’s Operations Director, Mike Lowndes believes the imminent review may in fact be an opportunity improve understanding of what legitimate umbrella companies do and to raise standards across the industry as a whole.
He said, “George Osborne’s statement talked about umbrella companies depriving people of basic employment rights like the minimum wage, a well run umbrella company that is professional, compliant and correctly structured does not do this. Part of our focus is at Exchequer Solutions is to enhance employment rights for our contractors and we enforce the national minimum wage at all times.”
He continued, “Personally I would welcome any new consultation which explores our work. For too long professional, compliant companies like Exchequer Solutions have been tarred with the same brush as those who do not always behave in professional manner. It is my hope that this will lead to a better understanding of what we do, how compliant companies work and will dispel some of the misconceptions that exist surrounding the industry. I would also welcome any new regulations that follow the review which help to remove unscrupulous operators from the sector. Not paying the minimum wage or depriving workers of employment rights is clearly unacceptable and for too long the behaviour of a few has had a negative impact on the reputation of the sector. Anything that prevents bad practice in the sector is a positive thing and will receive my full support.”
This highlights the importance for recruitment agencies to ensure the umbrella companies they are working with are reputable and fully compliant.
