Working in recruitment within the temporary contract market, we’re sure that you will be aware of how useful Umbrella Companies can be.
However, you will probably also be aware that there are several hundred operating in the UK that aren’t compliant with current legislation. As an agency, if you use a non-compliant company you could leave yourselves wide open to financial penalties from the debt transfer legislation. You may also have been advised that underpayments of PAYE tax is the liability of the umbrella company, however it is a personal tax and therefore the contractor will be liable.
Extract from Umbrella Companies Explained for Agencies:
HMR&C demand compliance from Umbrella Companies, however they do NOT offer audits or provide any ‘approval badging’, therefore we took it on ourselves to undertake a stringent audit in 2014. The successful completion of the audit means that we are pleased to be accepted as a valued member of APSCo. There are a number of companies that review and ‘approve’ umbrella companies, the stamp of approval is designed to prove that the umbrella company is serious about compliance. Needless to say we have put compliance at the very core of our business.
Get it right and you can expect a long and prosperous partnership which is beneficial to all parties involved.
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