FCSA chief executive Kermode reiterates call for licensing of umbrella companies
11 February 2015
A new government-approved licence for umbrella companies, based on the Freelance & Contractor Services Association’s existing code of conduct, should be introduced to help tackle “spurious” travel & subsistence claims made by contractors operating through such companies, according to the FCSA’s chief executive.
Wed, 11 Feb 2015
A new government-approved licence for umbrella companies, based on the Freelance & Contractor Services Association’s existing code of conduct, should be introduced to help tackle “spurious” travel & subsistence claims made by contractors operating through such companies, according to the FCSA’s chief executive.
HM Revenue & Custom’s consultation proposing changes to temporary workers relief for travel & subsistence closed last night [10 February].
The consultation looks into the use of overarching contracts by umbrella companies and employment agencies that seek to use such contracts to “exploit” the tax rules for travel & subsistence for temporary workers.
FCSA CEO Julia Kermode told Recruiter any removal of travel & subsistence tax relief for people employed through umbrellas contracts was “unworkable”.
“We don’t think their [HMRC] proposals are workable and we would prefer to see them take more action with compliance on the more spurious travel expenses being claimed through less compliant umbrella firms, which we think is creating the problem.
“Anecdotally, we have heard of workers being encouraged to claim mileage expenses that they’re not always incurring in order to top up their income.”
Last month, in the wake of Channel 4’s expose on tax-avoiding practices by employment agencies and umbrella companies, Kermode called for licensing for umbrella companies. She reiterated those calls today [11 February], adding such a move would tackle the problem of “spurious” claims.
“That would offer some comfort to HMRC as those with a licence can confirm they’re compliant.
“We have our code of conduct. We have been self-regulating for a number of years so that could form part of the solution but it might be there are some elements of the code HMRC wants to use and some elements of other existing organisations they would want to use.”
HM Revenue & Custom’s consultation proposing changes to temporary workers relief for travel & subsistence closed last night [10 February].
The consultation looks into the use of overarching contracts by umbrella companies and employment agencies that seek to use such contracts to “exploit” the tax rules for travel & subsistence for temporary workers.
FCSA CEO Julia Kermode told Recruiter any removal of travel & subsistence tax relief for people employed through umbrellas contracts was “unworkable”.
“We don’t think their [HMRC] proposals are workable and we would prefer to see them take more action with compliance on the more spurious travel expenses being claimed through less compliant umbrella firms, which we think is creating the problem.
“Anecdotally, we have heard of workers being encouraged to claim mileage expenses that they’re not always incurring in order to top up their income.”
Last month, in the wake of Channel 4’s expose on tax-avoiding practices by employment agencies and umbrella companies, Kermode called for licensing for umbrella companies. She reiterated those calls today [11 February], adding such a move would tackle the problem of “spurious” claims.
“That would offer some comfort to HMRC as those with a licence can confirm they’re compliant.
“We have our code of conduct. We have been self-regulating for a number of years so that could form part of the solution but it might be there are some elements of the code HMRC wants to use and some elements of other existing organisations they would want to use.”
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