How are umbrella companies regulated?

If you’re new to the world of contracting, you may be wondering how exactly umbrella companies work – and more importantly, how they are regulated. Trusting a third party with your money is a big deal after all. 

Carry on reading to find out more about how umbrella companies are regulated.

Are umbrella companies regulated by the government? 

While there are no government regulations surrounding the operation of umbrella companies, there are two key self-regulated bodies that help safeguard contractors from tax fraud. When choosing which umbrella to work with, it is important to check that they are accredited by either the Freelancer and Contractor Services Association (FCSA) or Professional Passport. These are considered very reputable bodies within the sector and can help contractors identify umbrellas that are compliant with UK law. 

Will it remain an unregulated sector? 

The Labour Market Enforcement Strategy document for 2022/23 outlines plans to ‘root-out non-compliance’ in the umbrella industry through establishing a Single Enforcement Body (SEB). 

However, some are skeptical about whether or not we will actually see this materialise due to the government’s poor track record.

Julia Kermode, founder of IWORK, said: “Westminister has been talking about regulating the umbrella sector for years and made no progress whatsoever. So I can’t help but take fresh promises with a pinch of salt.”

Mint Umbrella hopes to see positive progress when it comes to implementing regulation procedures, so that contractors and freelancers can feel safe and secure in the knowledge that they are working with fully compliant umbrella providers. 

Got any other questions? Give us a call on 02039676846 or email us at [email protected].

Remember, we are accredited by Professional Passport so get started with us today!