As umbrella firms come under fire once again, this time from representatives of the teaching profession, the Freelancer & Contractor Services Association (FCSA), the UK’s largest independent trade association for umbrella firms and accountancy providers, welcomed the opportunity to speak out on umbrella working on BBC Radio 4’s MoneyBox Live (17th June 2017). Joined by a spokesperson from the National Union of Teachers (NUT), FCSA pointed out that criticisms towards umbrellas are based on a misunderstanding about tax, employment costs and how pay is calculated.
FCSA is keen to point out that there are many supply teachers who are happy to use umbrella companies, particularly where they may be working in numerous different schools across the week, possibly through several different agencies. An umbrella consolidates all of these assignments into one payment, ensuring the correct tax and NICs are paid, and making the whole process smoother and more efficient.
Julia Kermode, chief executive of FCSA said: “We welcomed the opportunity to speak up and speak out on umbrella working which works very well for many supply teachers and other temporary staff working in other industries. However, we acknowledge that better communication is needed so that everyone in the supply chain, and particularly the worker, understands how their pay is calculated. There is still some confusion about the apparent deduction of employers’ NICs and the apprenticeship levy, however these costs are in addition to the workers’ gross pay and should be factored in when agreeing the assignment rate. All employers are legally required to pay employers’ NICs, as well as processing employee deductions, and agencies will also have these costs if they choose to pay workers through their in-house PAYE.
“Umbrella firms enable individuals to receive all 84 statutory rights and benefits of employment whilst working on numerous different assignments. Good compliant firms are wholly transparent in their dealings with workers, providing them with a clear contract of employment, all statutory rights and benefits, and transparency in how their pay is calculated.
“FCSA works hard to raise standards and promote ethical practices, and umbrella employment when done compliantly is extremely beneficial to the whole supply chain. I am disappointed that there continues to be widespread misunderstandings about umbrella, so I would welcome further talks with the NUT to dispel some of the misconceptions they clearly have about the role of umbrella employers. Communication needs to be improved all round.”