Statutory due diligence to tackle non-compliant umbrella companies

The scale of non-compliance in the umbrella company market and the detrimental impact that this has on workers taxpayers and the labour market remains a concern for the government.

On tax administration and maintenance day (18 April 2024) HMRC said it planned to publish new guidance later this year including an online pay checking tool to help umbrella company workers to check whether the correct deductions are being made from their pay.

Further the government is considering a due diligence requirement to ‘drive out bad actors from labour supply chains’. To this end it says it will continue to engage with the recruitment industry and other key stakeholders on the detail of a statutory due diligence regime for businesses that use umbrella companies.

Susan Ball employment tax partner at RSM UK said this announcement marked ‘a significant step for the umbrella and agency sector...