Umbrella company regulation in 'precarious position', warns IPSE

19 Apr 2024

Government proposals to enact a due diligence regime for the umbrella company market are in a 'precarious position, unless government shows some urgency, the Association of Independent Professionals and the Self-Employed (IPSE) has warned.

The government has said that it is 'minded to introduce a due diligence requirement to drive out bad actors from labour supply chains'.

HMRC will also 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.

IPSE said it supports this proposal but warned that a lack of parliamentary time before the next General Election puts the plans in a 'precarious position'.

Andy Chamberlain, IPSE's policy director, said: 'It's great that government is minded to do something about non-compliance in the umbrella company sector. Contractors want to see a regulated umbrella sector, and we're ready to work with government to chalk up how a due diligence requirement could work.

'But we need some urgency from government. It's been almost a year since it began consulting on the proposals – ones that should have been in place before the off-payroll working rules. With an election on the horizon, the plans are in a precarious position and risk being delayed even further.'