As Unite calls upon the NHS to outlaw what it calls ‘exploitative’ umbrella companies, Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA), the UK’s largest independent trade association which represents umbrella companies reacted by saying: “Like Unite, FCSA is committed to protecting the workforce from exploitation so I am disappointed to hear Unite’s national health officer for health Colenzo Jarrett-Thorpe tarring all umbrella companies with the same brush and calling for the NHS to ban the use of umbrella firms. I have been talking to NHS Improvement about the important role of compliant umbrella firms in the supply chain, and I am meeting up with their agency team in the next two weeks to discuss how we can work together in the best interest of contractors and freelancers.
“As a result of the IR35 reforms which took effect in the public sector in April we are indeed seeing many newcomers entering the umbrella market with no track record so due diligence is essential to minimise risk. We are particularly concerned about the increasing proliferation of offshore loans and disguised remuneration schemes that seek to reduce contractors’ taxable pay via contrived means. These schemes put individuals at significant personal financial risk as HMRC will pursue them for the unpaid tax and NICs, plus penalties and interest. From September 30th the new Criminal Finance Act means there will also be an additional risk for agencies to manage as they could be accused of not preventing tax evasion if they put contractors in touch with such dubious schemes. It is important that agencies and contractors choose compliant umbrella firms to partner with and I will also be raising this with NHS Improvement.
“FCSA accredited members adhere to a strict code of compliance and we are committed to ridding the industry of its cowboys as well as promoting umbrella employment as a positive choice for the hirer and the worker.”