Big news for “workers” in Umbrella Companies. A valid employment status could be yours – one day.
Employment Status and Umbrella Companies are a burden to the tax authorities who are determined to bring equality to the average “worker”.
Have you ever wondered why people use Umbrella Companies?
A question with the same answer is : Why do individuals and businesses take their profits offshore?
… to save tax.
Since the arrangement are usually legal, there is little that authorities can do but legislate against it and fight in the courts costing the tax payer money. You save at one end of the process and pay for it at the other end.
So who really wins?
The entity providing the incentives certainly saves a fortune by not having to regard you as an employee.
All the while everything is going smoothly you also feel like a winner but when you have a problem it’s you versus …. whom? The Umbrella Company? One of its outsourced service providers?
What is changing?
In short, nothing immediately. The authorities battling these schemes need to tip the balance in their favour. Moments like this are a step in the right direction to leveling the playing field.
As the article reads:
“It blows a hole in the way that employment agencies hide behind payroll and umbrella companies and pretend that they are not responsible for the employment of the workers they recruit.”
What follows next will govern whether a shift can be made to benefit “workers”.
Why do I keep putting “workers” in quotation marks?
It is because I am using the government definition of a worker. This link details exactly what is meant by this:
What is the future?
No doubt those most financially affected (those profiting from the Umbrella Company structures) will be restructuring so that their schemes can continue in some legal form now they have seen where this recent case might be leading.
Hopefully the authorities are a step ahead and we can have equality for all “workers”.
Are you worried about how you might be affected?
Please contact us to discuss your concerns: