Many umbrella companies claim to be the “most compliant” or “100% compliant” in the UK. However, this self-proclaimed title is rather dangerous when based on opinion rather than fact. While companies may indeed operate compliantly, what does this mean in an unregulated industry?
A search on LinkedIn will allow you to find posts and comments relating to non-compliant payroll companies, tax avoidance schemes and payroll scams. With this in mind, if you are new to the contracting market, how do you find a company that is going to provide you with the correct tax-deductible services?
The best place to start is surely on who not to use. HMRC have started to release and update a list of companies that have been prosecuted for tax avoidance schemes. Many of these no longer operate, but if you want to know who not to use then here it is.
A follow up question would be, is compliance just black and white? Can you be the most compliant when surely you are either compliant or not? Lets explore that.
A compliant umbrella company is one that follows all relevant legislation, laws and regulations related to employment and taxation. This includes, but is not limited to, paying candidates correctly, making the correct deductions form payments, producing and submitting reports, and following employment laws and regulations such as those related to minimum wage, working hours, and health and safety.
Another question would be what is a non-compliant payroll company? The simple answer is one that fails to follow the above.
To better understand compliance, there are several indicators that you can look for. Some businesses perform checks on companies on an annual, monthly, or timesheet basis, and umbrella companies may engage with these services to obtain a stamp of approval. However, it’s important to note that membership in these organisations does not guarantee compliance, nor does the lack of membership indicate non-compliance.
At Bishopsgate, we have chosen to engage with memberships in the FCSA, Professional Passport, and PayePass to provide our clients with a level of security and comfort. We follow all rules and regulations and believe that we operate in a compliant manner.
If you’re looking for a new umbrella company or have concerns about your current engagement, we invite you to contact us for a chat.