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Government response to Umbrella Consultation published

Alison Roberts

Alison Roberts | Legal Director

Thursday 18th Apr, 2024

The eagerly awaited Government response to the Consultation that explored future regulation of the umbrella market was published today. It turned out not to be the fully fledged proposals the industry had hoped for but a signpost as to where HMRC may be going as a result of the undoubtedly extensive submissions to them last August.

An interim or holding statement appeared in the HMRC summary of tax technical changes.  A full response to the Consultation was also promised ‘in due course’ together with new guidance later in 2024 which will include an online pay checking tool to help umbrella workers check deductions being made from their pay.

Statutory due diligence may be the way forward

Government indicated that a statutory due diligence requirement for businesses that use umbrella companies was at the forefront of their current thinking.

However, as the update made clear there are still further discussions which need to take place with the recruitment and labour industry and other stakeholders before final decisions are reached.

As always, here at PayStream we support the Government’s initiatives aimed at making the umbrella marketplace a safe and compliant one for workers, the economy and all involved in the supply chain.  

Related article - The long-awaited government consultation is published

Following the Good Work Plan of 2018, which introduced a commitment by the government to regulate umbrella companies, a call for evidence in 2022 gathered the opinions of over 400 contractors, representatives and stakeholders within the umbrella company market. As expected, the evidence gathered supported the rationale for state enforcement.

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