LITRG has released a research report entitled ‘Labour Market Intermediaries: a technical report outlining how umbrella companies and other intermediaries operate in the labour market and the implications for workers who use them’.
The report seeks to draw together evidence from a range of sources, to help form an overall picture of the current umbrella marketplace.
The report contains a discussion of disguised remuneration (DR) arrangements such as loan schemes, in which contractors and agency workers may become entangled.
HMRC’s recent research states that, despite the loan charge, about 30,000 individuals were involved in DR arrangements in 2018/19 and suggests that umbrella companies were heavily involved.
Key findings in the report
There is no single definition of an umbrella company – anyone can set up a company and label itself an umbrella company.
Some agencies do not offer workers the ability to be paid through an agency payroll. If workers want to accept an assignment, they have no choice but to work through an umbrella company.
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Meredith McCammond is a Technical Officer for LITRG and Chartered Tax Adviser, formerly in practice. LITRG is an initiative of the Chartered Institute of Taxation which is a charity. Since1998, LITRG has been working to improve the policy and processes of the tax, tax credits and associated...