The UK’s Umbrella Companies have to urgently repair the damage done to the industry’s reputation by a few rogue operators, a new study from a self-employed payroll provider suggests.

The survey polled 2,000 freelancers to sample their views and usage of Umbrella Services. Just 15.5% of the respondents were currently working as Umbrella Company Employees; of these, 69% said they saw the chief benefit as income maximisation, while 19% cited reduced administration as the chief benefit.

42.5% of the respondents who did not use Umbrella Companies said they did not wish to pay for the service, while 26.5% admitted that they did not understand the role and benefits of Umbrella Services. Surprisingly, 16.5% believed that an Umbrella Company would diminish their control over their paperwork, while 14.5% believed they did not need the help of an Umbrella Service and 11% expressed concerns about how Umbrella Companies operate.

Phil McDonald, the MD of the payroll firm behind the study, said the findings were “a wake up call for the Umbrella industry,” adding that there was a clear requirement to educate freelancers about the true benefits of Umbrella Services.

Trust has to be rebuilt by raising industry standards, adding: “For too long, a few rogue operators have given our industry a bad name. In actual fact, we should be there to help and support the freelancer, saving them time and money whilst ensuring they’re compliant to legislative and HMRC guidelines. It’s time that we out players that don’t want to play by the rules to restore trust with the people that matter most – our customers.”

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