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Umbrella companies: why it’s time for regulation

Rebecca Seeley Harris (RE Legal Consulting Ltd) explains the need for a comprehensive and constructive policy to protect both worker’s rights and revenues for the exchequer and the steps taken so far to regulate the industry.

Umbrella companies and other intermediaries have become increasingly prominent in the labour supply chain since they were first conceived in 2000. They were first brought to market because of the introduction of so-called IR35 the intermediaries legislation. They have grown steadily in use since the introduction in 2007 of the managed service company legislation (ITEPA 2003 Part 2 Chapter 9) and more lately the off-payroll reforms (ITEPA 2003 Part 2 Chapters 8 and 10) which took effect in the public sector in 2017 and the private sector in April this year.

This is a worrying development because the umbrella company sector is currently unregulated and there are signs of large...

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