UK.gov's new single enforcement body does not cover rogue umbrella companies, contractor campaigners complain
(2021/06/10)
- Reference: 1623313808
- News link: https://www.theregister.co.uk/2021/06/10/proposals_for_new_single_enforcement/
- Source link:
UK government proposals to create a workers' watchdog have been slammed by campaigners for not adequately covering umbrella companies, some of which have been accused of sharp practices as the IR35 off-payroll tax revamp expands their usage among contractors.
This week the Department for Business, Energy and Industrial Strategy [1]said it would launch a new organisation to tackle modern slavery, enforce the minimum wage and protect agency workers, work currently spread across three different regulatory bodies.
The single enforcement unit will take a “one-stop shop” approach to improve administration through better co-ordination and pooling intelligence, according to a BEIS statement.
[2]
But campaigners for the better regulation of umbrella companies – some of which have been accused of syphoning off pay through opaque fees and withholding holiday pay – said the new body would not go far enough in stamping out rogue practice.
[3]
[4]
Firstly, BEIS has set out no timetable for creating the single enforcement body, leaving workers grossly exposed, according to Rebecca Seeley Harris, chair of the Employment Status Forum and former senior policy adviser to HM Treasury’s the Office of Tax Simplifcation, and James Poyser, CEO of inniAccounts and online community Off-payroll.org.uk.
While the new body would be charged with ensuring vulnerable workers get the holiday and statutory sick pay they are entitled to without having to go through a lengthy employment tribunal process, there was no specific mention of the umbrella companies non-compliance issues, which is costing HMRC and the contingent workforce billions in pounds each year, the campaigners said in a statement.
[5]It's the UK contractor tax factor: IR35 outsiders gaining leverage in skills market, survey finds
[6]Proposed amendments to UK Finance Bill target rogue umbrella companies ripping off contractors after IR35
[7]UK taxman is supposed to know how IR35 reforms work but still lost appeal against TV presenter Kaye Adams
[8]The exodus continues: Less than half of contractors expect to stick with their employment set-up after IR35
Seeley Harris said she was concerned that the single enforcement body would only be established through primary legislation when parliamentary time allows. “We will continue to press the government to set a timetable for primary legislation, commit to legislate and ensure our policy recommendations, that stretch beyond curtailing abuses and also reflect modern working practices, are included. We will also continue to press for the regulation of umbrella companies themselves and/or licensing but, at least this step will mean that there is an appropriate regulatory body.”
Introduced in April, new IR35 tax rules put a greater liability on organisations in regulating off-payroll working. A study by inniAccounts.co.uk [9]has shown the new tax rules were supporting the growth of umbrella companies : 71 per cent of those inside IR35 are being paid by these third party admin and accountancy service outfits.
[10]
Poyser and Seeley Harris had [11]submitted a draft policy entitled "Umbrella companies - Call for Regulation" to Jesse Norman, the financial secretary to the Treasury, and Paul Scully, the Parliamentary under-secretary of state in the Department for Business, Energy and Industrial Strategy.
In May, the UK Parliament [12]decided not to select amendments to the 2021 Finance Bill designed to offer contractors protection from rogue umbrella companies. ®
Get our [13]Tech Resources
[1] https://www.gov.uk/government/news/government-to-protect-workers-rights-and-clamp-down-on-workplace-abuse-with-powerful-new-body
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YMHivDpJpT44MRbPx8hC1wAAAFQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YMHivDpJpT44MRbPx8hC1wAAAFQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YMHivDpJpT44MRbPx8hC1wAAAFQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2021/06/02/ir35_outsiders_getting_leverage_in/
[6] https://www.theregister.com/2021/05/21/amendments_to_finance_bill/
[7] https://www.theregister.com/2021/02/22/hmrc_ir35_kaye_adams_appeal_lost/
[8] https://www.theregister.com/2020/10/19/less_than_half_contractors_expect/
[9] https://www.theregister.com/2021/06/02/ir35_outsiders_getting_leverage_in/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YMHivDpJpT44MRbPx8hC1wAAAFQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2021/05/17/campaigns_umbrella_firms/
[12] https://www.theregister.com/2021/05/25/finance_bill_amendments_to_curb/
[13] https://whitepapers.theregister.com/
This week the Department for Business, Energy and Industrial Strategy [1]said it would launch a new organisation to tackle modern slavery, enforce the minimum wage and protect agency workers, work currently spread across three different regulatory bodies.
The single enforcement unit will take a “one-stop shop” approach to improve administration through better co-ordination and pooling intelligence, according to a BEIS statement.
[2]
But campaigners for the better regulation of umbrella companies – some of which have been accused of syphoning off pay through opaque fees and withholding holiday pay – said the new body would not go far enough in stamping out rogue practice.
[3]
[4]
Firstly, BEIS has set out no timetable for creating the single enforcement body, leaving workers grossly exposed, according to Rebecca Seeley Harris, chair of the Employment Status Forum and former senior policy adviser to HM Treasury’s the Office of Tax Simplifcation, and James Poyser, CEO of inniAccounts and online community Off-payroll.org.uk.
While the new body would be charged with ensuring vulnerable workers get the holiday and statutory sick pay they are entitled to without having to go through a lengthy employment tribunal process, there was no specific mention of the umbrella companies non-compliance issues, which is costing HMRC and the contingent workforce billions in pounds each year, the campaigners said in a statement.
[5]It's the UK contractor tax factor: IR35 outsiders gaining leverage in skills market, survey finds
[6]Proposed amendments to UK Finance Bill target rogue umbrella companies ripping off contractors after IR35
[7]UK taxman is supposed to know how IR35 reforms work but still lost appeal against TV presenter Kaye Adams
[8]The exodus continues: Less than half of contractors expect to stick with their employment set-up after IR35
Seeley Harris said she was concerned that the single enforcement body would only be established through primary legislation when parliamentary time allows. “We will continue to press the government to set a timetable for primary legislation, commit to legislate and ensure our policy recommendations, that stretch beyond curtailing abuses and also reflect modern working practices, are included. We will also continue to press for the regulation of umbrella companies themselves and/or licensing but, at least this step will mean that there is an appropriate regulatory body.”
Introduced in April, new IR35 tax rules put a greater liability on organisations in regulating off-payroll working. A study by inniAccounts.co.uk [9]has shown the new tax rules were supporting the growth of umbrella companies : 71 per cent of those inside IR35 are being paid by these third party admin and accountancy service outfits.
[10]
Poyser and Seeley Harris had [11]submitted a draft policy entitled "Umbrella companies - Call for Regulation" to Jesse Norman, the financial secretary to the Treasury, and Paul Scully, the Parliamentary under-secretary of state in the Department for Business, Energy and Industrial Strategy.
In May, the UK Parliament [12]decided not to select amendments to the 2021 Finance Bill designed to offer contractors protection from rogue umbrella companies. ®
Get our [13]Tech Resources
[1] https://www.gov.uk/government/news/government-to-protect-workers-rights-and-clamp-down-on-workplace-abuse-with-powerful-new-body
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YMHivDpJpT44MRbPx8hC1wAAAFQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YMHivDpJpT44MRbPx8hC1wAAAFQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YMHivDpJpT44MRbPx8hC1wAAAFQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2021/06/02/ir35_outsiders_getting_leverage_in/
[6] https://www.theregister.com/2021/05/21/amendments_to_finance_bill/
[7] https://www.theregister.com/2021/02/22/hmrc_ir35_kaye_adams_appeal_lost/
[8] https://www.theregister.com/2020/10/19/less_than_half_contractors_expect/
[9] https://www.theregister.com/2021/06/02/ir35_outsiders_getting_leverage_in/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YMHivDpJpT44MRbPx8hC1wAAAFQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2021/05/17/campaigns_umbrella_firms/
[12] https://www.theregister.com/2021/05/25/finance_bill_amendments_to_curb/
[13] https://whitepapers.theregister.com/
It's been a long day
Mike Lewis
I thought "Why umbrella companies?"
FTFY
batfink
This week the Department for Business, Energy and Industrial Strategy said it would launch a new organisation to tackle support modern slavery, enforce the keep wages to a minimum wage and protect agenc y workers ies .
the new body would be charged with ensuring vulnerable workers get holiday and statutory sick pay
Howard Sway
All governments love pretending to be interested in efficiency, so here's a suggestion that would actually be a lot more efficient : instead of seeing yet more bureaucracy added into the stew, make it a criminal offence to not pay workers what they have actually earned, you know with their actual work and all that. Send the bastards who don't to prison, and take the money owed from their personal pile, houses included. See how amazingly quickly they pay up, no "new body" required at all.
Velv
Another Government fudge to make a perceived problem worse rather than better.
Tax should be objective, a strict set of rules that can be clearly followed to determine any tax liability. All the government keeps doing is adding more subjectivity to the process thus expanding the exploitation of workers.
The tax structure in the UK is no longer fit for purpose and needs to be substantially replaced. But no government will do it because they know it will expose the exploitation of the lower paid today in favour of saving the higher paid money.
complaining that something just announced hasn't launched yet!!
"Firstly, BEIS has set out no timetable for creating the single enforcement body, leaving workers grossly exposed,"
From that analogy, as it doesn't exist then workers have always been grossly exposed.
did something change that makes people more exposed now than at any time before?