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Parasol lobbies Labour over umbrella company tax claims

Parasol has invited shadow business secretary Chuka Umunna to visit its Cheshire head office to “see how a compliant provider operates” and “open a constructive dialogue with the sector.”

The intervention comes after Labour floated the idea of tackling “the use of umbrella firms to avoid tax and national insurance” during its annual conference. Party officials reportedly estimate the measure could save the taxpayer &pound650m.

However, leader Ed Miliband made no mention of it in his keynote address and a party spokesman told Parasol afterwards that it was just “speculation” at this stage.

Despite this, several media outlets reported the following morning that action against umbrellas would indeed form part of a wider clampdown on tax avoidance if Labour regains power next year.

Derek Kelly, managing director at Parasol’s parent group Optionis, outlined his thinking in a letter to Streatham MP Mr Umunna.

Expressing concern that “our entire sector is in danger of being misunderstood and demonised” by Labour, Kelly wrote that politicians must distinguish between those companies that seek to break the law and employment specialists – such as Parasol – that support skilled contractors.

Kelly, a former KPMG executive, said he hoped Mr Umunna would accept the invitation.

He added: “We believe it’s vital that politicians of all persuasions engage with our sector and develop their understanding of how compliant providers like Parasol work.

“Of course there are some cowboys out there, and they need to be stamped out. I am a firm believer in rooting out malpractice, which is why I have called for strict regulation in the past.

“However, the adoption of a crude, one-size-fits-all approach by policymakers would be damaging, unwarranted and irresponsible.”

Founded in 2000, Parasol has employed more than 70,000 contingent workers – providing them with a contract of employment entitling them to statutory benefits such as holiday pay, sick pay and maternity / paternity pay.

The company maintains strong relationships with most of the country’s biggest professional staffing firms. 

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