With the upcoming changes to IR35 legislation, some of your contractors (currently working under a PSC) may decide to move to umbrella employment.
With the upcoming changes to IR35 legislation, some of your contractors (currently working under a PSC) may decide to move to umbrella employment.
With the upcoming changes to IR35 legislation, some of your contractors (currently working through a Personal Service Company (PSC)) may fall within the scope of IR35. Instead of employing these contractors directly you may wish to engage with an umbrella company who will manage the employment relationship on your behalf.
There are a lot of umbrella companies to choose from and it’s important to choose the right one that will reflect well on your business and look after your contractors. So how can you be sure you’ve made the right choice?
Carry out due diligence
Appropriate due diligence should be carried out on all umbrella companies. Consider the following:
At the very least, ensure that the company is a member of the FSCA or Professional Passport approved. The FSCA is a membership association that ensures its members undergo a comprehensive review of their business services, operations, policies and processes.
Stick to your compliance checks
Ensuring that your own internal compliance processes are robust regardless of whether you work with umbrella companies or not. Umbrella companies will carry out compliance checks but we recommend that you also carry out some of these checks too.
The most likely reason for a recruitment company to use an umbrella company is to mitigate risk, however ensuring your contractors, and you, are working with compliant and ethical umbrella companies will be key. We recommend you check out the ASPCo Umbrella Affiliates, all of whom have passed APSCo’s rigorous application process and are required to undertake an annual external compliance review.
If you have any queries please contact Marie Pegram on 01462 687333 or by email m.pegram@uhy-uk.com.
UHY Hacker Young are recruitment sector specialists and provide expert advice on accounting, finance, taxation and business growth. We understand recruitment and can support you through the ever-changing landscape of this fast-paced industry. With IR35 changes around the corner we can help you build a robust system to tackle this challenge, provide payroll support and review your existing contracts with assistance from our network of other recruitment specialists.
For a simple overview on umbrella companies you can watch our short video: IR35 – contractors within the scope, your responsibility
For more information on the key deadlines and guidance ahead of the changes being introduced on 6th April 2021 please download our IR35 Off-Payroll Reform Guide for Recruitment Businesses: