Umbrella Company Employees may be interested to hear that leading industry organisations have responded rapidly to Labour MP Michael Connarty’s efforts to abolish travel and subsistence schemes in the recruitment industry.
Mr Connarty’s Early Day Motion aims to tackle the abuse of these schemes, which he considers a threat to low paid workers. He objects to all schemes where employers benefit from tax relief through them, even where workers are paid well over the national minimum wage. In an interview with Recruiter magazine, he said: “I think it has to be raised with HMRC because it is a way of avoiding tax.”
Acknowledging that abuse of the schemes in the more vulnerable, low-paid end of the market, APSCo CEO Ann Swain said that it was “just wrong” to imply that such problems were endemic to the recruitment industry as a whole. She added: “This behaviour is not indicative of the professional staffing sector, where highly paid and skilled individuals choose to work through limited companies to provide business consultancy services.”
Highly skilled professionals who choose to work through Umbrella Companies are also eligible for such allowances and are clearly in a different category to unskilled, low-paid works.
Ms Swain’s comments were echoed in remarks made by REC chief executive Kevin Green, who said: “However, we must not lose sight of the fact that there are also some legitimate schemes and legitimate providers who do an excellent job for flexible workers across the labour market.
Mr Green shared Ms Swain’s view that real abuses need to be tackled more efficiently by HMRC, but not at the expense of tarring the entire industry with the same brush.