Government updates on Umbrella Consultation

On 18 April 2024 the REC was sent the government’s announcement for Tax Administration and Maintenance Day and the next steps on responding to their umbrella company consultation. The key announcement is that “The government is minded to introduce a statutory due diligence regime for businesses that use umbrella companies and will continue to engage with the recruitment industry and other key stakeholders on the details of this.”

We have already had an invitation to talk directly to officials once again as they begin to shape that due diligence guidance. We will be taking them up on that offer asap, and of course, canvassing the views of REC members on next steps.

But on the face of this information, we are concerned as to whether due diligence can go anywhere near far enough, fast enough. It has been a year since the government issued the consultation, after all. REC has long stressed to the government and the civil service about the need for balance - between a reasonable level of due diligence but also the need for umbrellas that operate in a non-compliant manner to be held to account.

That accountability and liability has to sit with the companies that are non-compliant, rather than other businesses within that supply chain that have no control over the actions of those umbrellas.

We will keep members abreast of any further updates. The announcement today confirms once again the departments’ intention to continue to engage with our industry, and we will ensure we are a key part of this engagement.