As published by umbrellacompanies.org.
It hasn’t been long since the new umbrella contractor trade industry body known as All Umbrella Companies Are Equal has launched, but is making serious waves.
The industry reformer’s Best Practice Charter, a document designed to provide more support for umbrella contractors, might have been met with skepticism initially, but the contracting industry has actually begun to adopt the tenets put forward by the charter. In fact, the ‘Straight Talking’ motto of the charter has been adopted by no less than 26 firms working within the umbrella company sector in just a month or so!
It’s an all-too common refrain nowadays: contractors have been running into serious tax bills as high as five figures or even more because of less-than-honest umbrella companies operating unscrupulous tax avoidance schemes. Her Majesty’s Revenue & Customs has placed this sort of activity square in its sights, and many contractors are ending up facing HMRC’s wrath for participating in illegal tax avoidance schemes that they didn’t even realise they were involved in.
The problem here is that there’s no industry body to regulate umbrella company behaviour. HMRC doesn’t have a say in approving umbrella companies, even though you may have heard otherwise; the downside in this is that contractors are left out in the cold when it comes to choosing an umbrella company that’s not going to end up causing more problems down the line; likewise operating through a personal service company is less of a viable option as it was in the past, since the taxman has had a bee in its bonnet about IR35 enforcement over the past few months as well.
This is where All Umbrella Companies Are Equal has decided to step in by campaigning for better transparency when it comes to umbrella company practices. The website’s forums are public and are for the discussion of umbrella company contractor experiences, making it easy for those looking for specific information about a particular umbrella company and its practices without actually becoming a member.
Meanwhile, the Best Practice Charter put forward by the industry body, which was drafted with HMRC guidelines in mind, could provide a framework for a regulatory body somewhere down the road. This is a fantastic development in my opinion; I can only hope that more and more umbrella companies join the ‘Straight Talking’ movement and adopt the charter in order to safeguard the financial health of their member contractors.