With the planned changes to IR35 in the Private Sector round the corner, research from the Association of Professional Staffing Companies (APSCO) shows a vast majority of professional recruitment companies are expecting Umbrella companies to be utilised far more going forward.
The survey from APSCO revealed that 91% of those polled within professional recruitment believe that PSC’s will be dropped in favour of Umbrella services due to the new rules, which come into effect as of April 2020.
With similar changes already taken in the Public Sector in 2017, research also shows that 55% of professional recruitment companies had already seen a drop off in those using a PSC with the majority of these going via an Umbrella provider.
Samantha Hurley, Operations Director at APSCO and Co-Chair of HMRC’s IR35 Forum, commented:
“It is unsurprising that our membership expects an increase in umbrella company usage: it is reasonable to expect that employers which engage contractors directly are likely to be seeking ways to mitigate risk. Contingent workers, meanwhile, look set to increasingly move away from PSC solutions if their assignments are caught by the new rules.”
“However, while the majority of service providers are compliant and ethical, there are exceptions to the rule. Following changes to IR35 in the public sector, our members reported an increase in unscrupulous umbrella companies which were very willing to exploit contractors’ wishes to make up some of the shortfall in income because they were being taxed as employees. We essentially saw non-compliance in the umbrella sector replace non-compliance in the form of false self-employment.”
“It is vital that anyone seeking to engage an umbrella company ensures that they are able to differentiate between ethical providers and those which sell non-compliant solutions. All APSCO affiliate umbrella companies, for example, commit to a strict code of conduct and undergo a rigorous application process. They are also required to undertake an independent annual compliance audit which is carried out by one of four equally robust providers: Saffery Champness; EY; Professional Passport or the FCSA.”
ePayMe are not only members of APSCO but also accredited with Professional Passport and welcome the findings as a positive to what has been a very sceptic sector over the past ten years.
If you have any questions regarding the scheduled changes in April 2020 to the changes in IR35 then please do get in touch on 01252 863 700 and we will be more than happy to talk you through the options for your workers.
Source: Recruitment Buzz