- Directory of Members
In response to the BBC’s One Show, FCSA has written to them in order to have a right of reply:
The One Show presented an unbalanced report on Tuesday’s show, taken in by UCATT’s inaccurate propaganda, suggesting that umbrellas are some sort of “loophole” which we strongly refute. Umbrella employment enables workers to undertake a number of temporary assignments whilst having full employment rights, statutory benefits, and continuity of employment. A fully compliant umbrella employer manages the commercial, employment, taxation and statutory risks associated with the use of temporary workers for the supply chain. It is certainly not a loophole; umbrella employers are simply delivering the services that they are commissioned to do by others within the supply chain.
Onshore Intermediaries legislation, set out in the Finance Bill 2014, resulted in agencies being liable for workers PAYE, including employers NICs, unless it is shown that the individual is genuinely self-employed. HMRC published criteria to determine genuine self-employment, however most agencies do not have the systems or infrastructure to fully verify workers, so need to pay them via PAYE. By definition, this is more expensive with holiday pay, employers NI, pension contributions needing to be accounted for on top of the workers gross pay. In most cases, agencies were unable to renegotiate assignment rates to cover the increased cost, with the only possible outcome being reduced income for the worker.
Given the recent legal changes tackling false self-employment, project budgets should be planned to take account of the full costs of employing workers rather than the previous, cheaper self-employed mechanism.
We are very concerned that there is a lack of clarity regarding workers pay, difficult to understand payslips, and sometimes expectations of a higher rate of pay. We raised this issue in our recent response to a HMRC consultation, and are pleased that the Government has listened and its Department of Business Innovation and Skills will be consulting on the problem later in this year.
We are disappointed with the unrepresentative view portrayed by the BBC’s One Show, and also surprised that such a credible media outlet did not seek to understand the full picture in order to present a true and balanced analysis of the facts.