Experts and contractors have been calling for help regulating and managing umbrellas as IR35 forces more and more contractors to use them to secure work. Unfortunately, contractor abuse has become rampant of late, and the umbrella company can determine so many of the factors and working conditions of contractors that many are concerned about what will happen to contractors as a whole.
Many experts are calling for a toll to be developed that will report data that highlights disguised remuneration schemes and interrogate the data reported by umbrellas. In addition, there needs to be a calculator that is provided by HMRC to keep umbrellas honest and to make sure that disguised remuneration is not being used to contract with unsuspecting contractors.
There could also be a payslip checker that would allow contractors to check that they were paid correctly and that the right amount of tax was taken out of each paycheck. This would mean that contractors would be able to verify their pay and report umbrellas that are not compliant.
Experts have also suggested that a benchmark PAYE amount be offered to prevent confusion about common currency when assessing the value of roles. It has been suggested over and over that the compliance of everyone being regulated by IR35 needs to be constantly reviewed by a compliance reporting third party. This would prevent non-compliant offerings from cropping up at all.
HMRC continues to ignore the advice of experts and the cries for help from contractors. The treasury has already identified umbrellas as the reason for £1 bn in lost funds each year. And yet, nothing has been done to attend to this problem.
Experts continue to try and streamline and improve the processes that are in place despite the complete disregard of the government for the plight of contractors. There are many reasonable suggestions that could be used to create solutions for these problems, but so far, HMRC and the government have shown little interest in problem-solving.
