Quite frankly, there are lots of people who don’t understand what an umbrella company is and realistically you don’t need to know every last detail either. However, what you should know is that as an agency, if you use a non-compliant umbrella company you could leave your business and your clients’ businesses wide open to financial penalties from HMRC.
UK businesses hiring contractors through UK agencies can be at risk if they do not look beyond the agency to check whether the real source of the workers lies offshore. Agencies promoting such schemes and their clients are at risk of being found to be the employer, in law, and therefore liable for unpaid national insurance contributions. They are also at risk of financial penalties under the Debt Transfer Legislation.
Personal service companies (one man Ltd Companies) are also not a risk free option for recruitment agencies with the Agency Workers Regulations, changes to IR35 tests and the association between PSC’s and tax avoidance in the Public Sector.
If your contractors work through a compliant umbrella company, like ContractorUmbrella, you can breathe a sign of relief. If you would like to know more, then please contact us on 01026 713 680, or alternatively you can request a copy of our "Guide to Umbrella Companies for Agencies" by clicking here.