Julia Kermode, chief executive of the Freelancer & Contractor Services Association, the UK’s largest independent trade association whose members provide professional support services to some 120,000 freelancers and contractors said:
“At the launch event this morning, it was pleasing to hear the Prime Minister acknowledging that ‘the flexibility and responsiveness of the UK workforce is a key strength, much of our success depends on an open and innovative approach’ which bodes well as we prepare to leave Europe and will need to rely on the skills of the flexible workforce to help us through this uncertain period.
“Specifically, we are pleased that Mr Taylor clearly recognises the importance of umbrella firms as a valuable part of the supply chain and has listened to our evidence. In particular I am pleased that the review has concluded that more should be done on transparency of pay, something that I and FCSA have campaigned for tirelessly in recent years. Compliant umbrella firms are wholly transparent in all of their dealings in the supply chain, and particularly how they calculate pay for their employees, plus they provide a clear contract of employment with all 84 statutory rights and benefits which accompanies employment. It is very clear that the review panel appreciates the important contribution of umbrella firms within the supply chain, collecting approximately £3bn for the Exchequer annually. We also welcome plans for better policing of the umbrella sector, we already rigorously test FCSA Accredited Members for compliance annually and we are continually disappointed by actions of less compliant firms operating dubious schemes that seem to tarnish the whole sector with the same brush.
“The proposal for greater clarity regarding worker status branding such workers “dependent contractors” makes sense in theory because current legislation is complex. Taylor’s review recommends that “control” should play a greater role in determining status which could be an improvement on HMRC’s preferred trio mantra of “supervision, direction or control”, however status is inherently complicated so it is difficult to see how this would translate into practice. Any such new legislation should be subject to public consultation, and care will need to be taken to ensure that it truly does work in practice without unintended consequences. As the PM said this morning ‘good work is in the interests of good business and the economy as a whole’. The proposed online tool for determining employment status could be positive, but our recent experience of the IR35 tool has not been good so I do not have any confidence in the ability to develop something suitable that truly works as it should.
“We were also pleased to hear that the review proposes that the Government should examine how the Apprenticeship Levy ‘could be made to work better for those working atypically, including through agencies’. This is good news for umbrella firms and we have repeatedly expressed our concerns to the Government on behalf of our members requesting that intermediaries are exempted from the Levy because their payroll is artificially high. The Levy has been one more cost to be borne and another tax on a sector that has had more than its fair share of extra burden in recent years so I welcome any review.”