UK.gov finally proposes to police rogue umbrella companies but leaves questions unanswered

Show me the money! say campaigners hoping to stamp out nefarious practices


At the eleventh hour, UK government has detailed plans to regulate umbrella companies, some of which stand accused of dodgy dealings as their use grows among IT contractors after IR35 tax rule changes.

Following an earlier announcement of a Single Enforcement Body to tackle modern slavery, enforce the minimum wage, and protect agency workers, the Department for Business, Energy and Industrial Strategy (BEIS) has included a detailed response to a labour market consultation which addresses umbrella companies.

It says part of the role of the new Single Enforcement Body (SEB) would be to regulate umbrella companies, a point omitted in the initial release. IT contractors have been increasingly using umbrella companies since the introduction of new IR35 rules in April. An element among the intermediary employers has been accused of holding back holiday pay and skimming off pay in the form of opaque fees.

In its consultation response [PDF], BEIS said umbrella companies - which provide accountancy and admin services - did not currently fall within the remit of the Employment Agency Standards Inspectorate, but the government has now committed to giving the state a role in policing the activities of these firms. Hence the promise of regulating them with the Single Enforcement Body (SEB).

However, campaigners have said details regarding how enforcement would work in practice are yet to be resolved. Rebecca Seeley Harris, chair of the Employment Status Forum and a leading expert on employment and tax status, said funding, which is subject to the next Spending Review, would need to be sufficient for SEB to fulfil its remit.

Similarly, the body should be staffed with people who understand how the market works and the loopholes exploited.

"The response document is a high-level document and does not go into specific detail but the framework is certainly a huge step forward in terms of regulation of the umbrella company industry and the protection of workers," Seeley Harris said.

"There is much detail to be worked on, and the devil is in that detail. We intend to keep pushing the government for a legislative timetable and guide the content."

Working with James Poyser, CEO of inniAccounts and founder of campaigning website offpayroll.org.uk, Seeley Harris has put together the draft policy "Umbrella companies – Call for Regulation", which has been submitted to Jesse Norman, financial secretary to the Treasury, and Paul Scully, Parliamentary under-secretary of state in EIS.

In May, Parliament decided not to select amendments to the 2021 Finance Bill designed to offer contractors protection from rogue umbrella companies. ®

Similar topics

Broader topics

Narrower topics


Other stories you might like

  • Lonestar plans to put datacenters in the Moon's lava tubes
    How? Founder tells The Register 'Robots… lots of robots'

    Imagine a future where racks of computer servers hum quietly in darkness below the surface of the Moon.

    Here is where some of the most important data is stored, to be left untouched for as long as can be. The idea sounds like something from science-fiction, but one startup that recently emerged from stealth is trying to turn it into a reality. Lonestar Data Holdings has a unique mission unlike any other cloud provider: to build datacenters on the Moon backing up the world's data.

    "It's inconceivable to me that we are keeping our most precious assets, our knowledge and our data, on Earth, where we're setting off bombs and burning things," Christopher Stott, founder and CEO of Lonestar, told The Register. "We need to put our assets in place off our planet, where we can keep it safe."

    Continue reading
  • Conti: Russian-backed rulers of Costa Rican hacktocracy?
    Also, Chinese IT admin jailed for deleting database, and the NSA promises no more backdoors

    In brief The notorious Russian-aligned Conti ransomware gang has upped the ante in its attack against Costa Rica, threatening to overthrow the government if it doesn't pay a $20 million ransom. 

    Costa Rican president Rodrigo Chaves said that the country is effectively at war with the gang, who in April infiltrated the government's computer systems, gaining a foothold in 27 agencies at various government levels. The US State Department has offered a $15 million reward leading to the capture of Conti's leaders, who it said have made more than $150 million from 1,000+ victims.

    Conti claimed this week that it has insiders in the Costa Rican government, the AP reported, warning that "We are determined to overthrow the government by means of a cyber attack, we have already shown you all the strength and power, you have introduced an emergency." 

    Continue reading
  • China-linked Twisted Panda caught spying on Russian defense R&D
    Because Beijing isn't above covert ops to accomplish its five-year goals

    Chinese cyberspies targeted two Russian defense institutes and possibly another research facility in Belarus, according to Check Point Research.

    The new campaign, dubbed Twisted Panda, is part of a larger, state-sponsored espionage operation that has been ongoing for several months, if not nearly a year, according to the security shop.

    In a technical analysis, the researchers detail the various malicious stages and payloads of the campaign that used sanctions-related phishing emails to attack Russian entities, which are part of the state-owned defense conglomerate Rostec Corporation.

    Continue reading
  • FTC signals crackdown on ed-tech harvesting kid's data
    Trade watchdog, and President, reminds that COPPA can ban ya

    The US Federal Trade Commission on Thursday said it intends to take action against educational technology companies that unlawfully collect data from children using online educational services.

    In a policy statement, the agency said, "Children should not have to needlessly hand over their data and forfeit their privacy in order to do their schoolwork or participate in remote learning, especially given the wide and increasing adoption of ed tech tools."

    The agency says it will scrutinize educational service providers to ensure that they are meeting their legal obligations under COPPA, the Children's Online Privacy Protection Act.

    Continue reading
  • Mysterious firm seeks to buy majority stake in Arm China
    Chinese joint venture's ousted CEO tries to hang on - who will get control?

    The saga surrounding Arm's joint venture in China just took another intriguing turn: a mysterious firm named Lotcap Group claims it has signed a letter of intent to buy a 51 percent stake in Arm China from existing investors in the country.

    In a Chinese-language press release posted Wednesday, Lotcap said it has formed a subsidiary, Lotcap Fund, to buy a majority stake in the joint venture. However, reporting by one newspaper suggested that the investment firm still needs the approval of one significant investor to gain 51 percent control of Arm China.

    The development comes a couple of weeks after Arm China said that its former CEO, Allen Wu, was refusing once again to step down from his position, despite the company's board voting in late April to replace Wu with two co-chief executives. SoftBank Group, which owns 49 percent of the Chinese venture, has been trying to unentangle Arm China from Wu as the Japanese tech investment giant plans for an initial public offering of the British parent company.

    Continue reading
  • SmartNICs power the cloud, are enterprise datacenters next?
    High pricing, lack of software make smartNICs a tough sell, despite offload potential

    SmartNICs have the potential to accelerate enterprise workloads, but don't expect to see them bring hyperscale-class efficiency to most datacenters anytime soon, ZK Research's Zeus Kerravala told The Register.

    SmartNICs are widely deployed in cloud and hyperscale datacenters as a means to offload input/output (I/O) intensive network, security, and storage operations from the CPU, freeing it up to run revenue generating tenant workloads. Some more advanced chips even offload the hypervisor to further separate the infrastructure management layer from the rest of the server.

    Despite relative success in the cloud and a flurry of innovation from the still-limited vendor SmartNIC ecosystem, including Mellanox (Nvidia), Intel, Marvell, and Xilinx (AMD), Kerravala argues that the use cases for enterprise datacenters are unlikely to resemble those of the major hyperscalers, at least in the near term.

    Continue reading

Biting the hand that feeds IT © 1998–2022