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Financial Secretary recognises role of responsible umbrella companies

Responding to a written question posed by Guto Bebb, Conservative MP for Aberconwy, who asked: “what steps his Department is taking to stop agencies using umbrella companies to manage the payroll function of companies within the construction industry” David Gauke MP, Financial Secretary to the Treasury stated in a written response: “Umbrella companies have been a part of the UK labour market for many years and, when operated responsibly, provide a useful conduit through which payments, including tax, can be made. As such, Her Majesty’s Revenue and Customs (HMRC) are not taking steps to stop agencies using umbrella companies to manage the payroll function of companies within the construction industry.”

Julia Kermode, chief executive of the Freelancer and Contractor Services Association (FCSA) welcomed the comment: “It is refreshing to hear that the Government has no intention to stop agencies using umbrella companies and that it recognises the value of umbrella companies and the important role they have in supporting the UK’s flexible labour market. 

This is particularly timely given the various recent media reports that have unfairly tarnished our sector, and the reputation of the many compliant and responsible umbrella employers working in the best interests of freelancers and contractors.

“I am pleased that the Government understands the role of umbrella employers, and that it is a positive choice for the majority.  It is the cowboys in the industry operating dubious practices who give umbrella firms a bad name.”

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