Firm calls on Government to clean up umbrella company market
The UK’s leading umbrella company, Parasol, has urged the Government to clamp down on “unethical and offshore” umbrella schemes by creating a regulatory body which is independent of the umbrella industry.
The company’s MD, Derek Kelly, said that he welcomed recent Government initiatives which affect the sector (such as new HMRC action against offshore umbrella vehicles), however he said a dedicated consultation for the industry is the best solution for the sector.
“We firmly believe the sector should be subject to the same level of scrutiny and regulatory oversight as banking and financial services. After all, we are looking after people’s livelihoods.”
Kelly said that, without Government action being taken, all umbrella companies (both reputable and not so reputable) would all be “tarred with the same brush.”
“Regulation would help contractors to make more informed decisions when choosing a provider, and would help to raise standards generally throughout the industry.”
Contract opportunities ‘rise by almost a quarter’ in a year
A contractor services group, NoPalaver, estimates that the number of UK-based contracting opportunities has risen by almost a quarter over the past year.
Using the latest ONS statistics as a benchmark, the company says that the total number of people working in the IT industry has risen from 555,000 in March 2010 (during the credit crunch) to just under 720,000 in early 2013.
Furthermore, the number of roles available for freelance and contracting IT professionals has risen by 23% – to 92,000 compared to last year.
Graham Jenner, Director at NoPalaver, commented: “There was high demand for self-employed contractors before the credit crunch hit, so it is good to see a return to the high rates which compensate for relative insecurity in employment that is part of a contractor’s life.”
How many real startup businesses are there in the UK?
Responding to a Freedom of Information request from an online contractor accountancy firm, HMRC has revealed that the number of new companies which set up staff payrolls over the past year was under half the total number of new company formations – around 200,000 payrolls compared to 450,000 incorporations (during the 2012/13 tax year).
Crunch Accountancy said that the HMRC figure was a far more accurate indicator of the health of the economy than formation statistics which are more often quoted by the media. The reason being that many companies are either dormant, or are used as subsidiaries by existing businesses, rather than trading vehicles.
Commenting on the news, the firm’s training manager, Laura Hughes, said: “These types of companies contribute essentially nothing to the wider economy, hence are not an accurate barometer of UK business activity.”