One Month on and 26 companies agree to the “Umbrella Company Best Practice Charter”.


Since the initial launch of All Umbrella Companies Are Equal, the website aimed at providing a level playing field within the contracting industry, the Best Practice Charter has attracted significant attention despite initial skepticism. Although several companies have previously tried to engage with the industry and failed, the concept seems to have captured the imagination of many of the industry’s major players, with 26 companies adopting the ‘Straight Talking’ logo.

Recent press coverage has highlighted how thousands of contractors have been left with five figure+ tax bills thanks to unscrupulous companies that have operated tax avoidance schemes, this now appear to be the focus of HMRC’s attention.  The schemes mechanisms were not transparent and many contractors were not aware of what they were signing up to. For instance BN66 has resulted in a 6-year legal battle with contractors fighting to overturn retrospective tax penalties.

Despite repeated claims in the media, HMRC do not ‘approve’ individual umbrella companies and there is no regulatory industry body currently in place, which leaves contractors with no guidance to rely on when looking for an umbrella provider. There is always the option to operate through a PSC, although many contractors are put off by HMRC’s ever more rigorous and restrictive guidelines on IR35.

All Umbrella Companies Are Equal is therefore asking for help from contractors to highlight experiences with umbrella companies, both good and bad. The open forum enables contractors to ask questions publicly which will then be put to members and non-members to answer – equally publicly. This will give contractors the opportunity to shape a safer and more compliant industry, with the aim of raising awareness of tax avoidance schemes, which are putting contractors at risk, and to provide a benchmark standard.

All ‘Straight Talking’ umbrella companies have signed up to a Best Practice Charter, which is based on HMRC guidelines. This will provide a foundation from which to create a regulatory body for umbrella companies that is designed to protect both contractors and the recruitment agencies they work with.

This month sees Roger on a mission to review the umbrella companies out there making ‘tempting’ offers to contractors; some of the most recent claims include offers of over 90% take home pay, loan scheme’s based on devaluing currencies and the best to date; suggestions from one company on how to ‘legally avoid tax’!

So if you’re a contractor who is not sure where to go for an unbiased view of which umbrella company to choose, then ask Roger on the AllUmbrellaCompaniesAreEqual website.