Work flexibility is something many are actively seeking in today’s job market, with many workers searching for opportunities in the contracting landscape. Of the 33 million workers in the UK, 4m are self-employed.
Of these 33 million workers, 1.7m are currently temporary workers; this has increased by around 200,000 since 2020. And currently, 512,000 would choose temporary jobs over permanent ones, which is the highest number on record.
660,000 temporary workers are currently employed through Umbrella companies. The Umbrella payroll market is divided into:
- Accredited compliance-focused businesses FSCA and PP
- Non-accredited companies
- Aggressive models such as mini umbrella companies and loan schemes
These aggressive models are usually non-compliant umbrella companies. We have written previously about how to spot non-compliant Umbrella companies and how to ensure you don’t end up working with one- which you can read here.
New Government Consultation on Tackling Non- Compliance
However, not all is lost, the authorities are clamping down on non-compliant umbrella companies. HMRC have published various documentation on compliance, including their list of tax avoidance schemes and their guidance on working through an Umbrella company, and the recent Spring Statement introduced imprisonment for promoting tax avoidance schemes. This is beneficial for contractors as it will enable them to work under an umbrella company that is fully compliant.
The government has also published a new consultation, seeking views from stakeholders on proposals to tackle non-compliance with both tax and employment rights by umbrella companies, how to regulate umbrella companies, and tackling tax non-compliance in the umbrella company market.
If you would like to learn more about HMRC’s new consultation click here or contact our Business Development Director, Alex Moore on 07930 887019 or via email at alex.moore@sapphireorg.co.uk.
Umbrella companies are often regarded as the easiest way to operate and get paid as a contractor. When you work with an umbrella company, all of the administration will be dealt with; invoicing, employment rights and benefits, auto enrolment pension, calculating tax & National Insurance obligations and making payments to HMRC will all be handled for you by a team of experts.
Read more about Sapphire’s umbrella company option here.
The benefits of using Sapphire’s Umbrella Company
There are many benefits to using Sapphire as an umbrella company. Some of these include:
- FCSA accredited, leaving no unexpected tax bills for anyone in the supply chain, as we make all the necessary PAYE and NI deductions to HMRC.
- Quick payments – we process same day payments, so contractors are always paid on time and usually by 9am.
- A team of experts that are on hand from 8.30am-6pm Monday-Friday to help with any enquiries plus our instant WhatsApp service.
- Dedicated agency Account Managers.
- Continuous employment and benefits such as holiday pay, pensions and statutory payments.
- Private pension options via Salary Sacrifice to help improve contractors tax efficiency.
If you’re a contractor and would like to find out more about any of our services, get in touch on 01625 539 997 and our experienced advisors will be happy to talk through your options.
If you’re a recruitment agency and would like to discuss the latest consultation and the potential risk to your business, get in touch with our Business Development Director, Alex Moore on 07930 887019.
