Umbrella company red flags for recruiters

Recruiters, are you always mindful of non-compliant umbrella providers when looking for a partner? It’s vital to know the red flags that you should look out for so you can help protect your candidates and offer them some advice. 

What should recruiters be aware of? 

• ‘Approved by HMRC’ – HMRC does not approve companies for complying with laws.However, you can search for approved providers on the Professional Passport or FCSA website. 

• ‘IR35 Compliant’ – False IR35 claims are used to lure in contractors who are concerned about the legislation. Nonetheless, the legislation does not apply to umbrella companies due to contractors being their employees, so it is deliberately misleading. 

Other tips? 

• Do your research – check out the umbrella on Companies House to ensure that it is legitimate. For example, do the directors have experience? If so, is it a long list of failed brollies? Yeah, probably not a good sign…It’s also a good idea to scour the web for reviews, as well as explore the umbrella’s website for any skeletons (e.g. is it actually accredited or have they just nicked the logo from the accreditor?). 

• Take-home pay isn’t too good to be true – We all know that over 80% take-home pay means one thing: tax avoidance. Don’t get your candidates in a sticky situation with HMRC, check your facts!

Got any queries? Our team is here to provide you with trusted advice. Give us a call on 02039676846, email us at [email protected] or visit our website for more information. Remember, Mint is an accredited umbrella company so do let us know if we’d be a good fit for your candidates!