The UK authorities is coming beneath stress to disclose the state of its plans to control umbrella corporations after it emerged that the enforcement body it promised to create is unlikely to materialise
By
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Caroline Donnelly,
Datacentre Editor
Published: 12 Jan 2023 13:15
The UK authorities’s dedication to defending IT contractors from the well-documented malpractice carried out by non-compliant umbrella corporations is being referred to as into query, following the admission that plans to create an enforcement body to control such companies have been shelved.
Business secretary Grant Shapps confirmed throughout a House of Commons oral proof session in mid-December 2022 that plans to create a Single Enforcement Body (SEB), the remit of which would come with conserving tabs on non-compliant umbrella corporations, had been placed on maintain.
The Department for Business, Energy and Industrial Strategy (BEIS) set out plans in June 2021 to create a “powerful watchdog” that will see three main authorities businesses be a part of forces to clampdown on staff’ rights violations and supply assist to umbrella company contractors.
The businesses concerned have been set to incorporate HM Revenue & Customs (HMRC), the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate (EASI), with BEIS speaking up the transfer as a key step in its work to guard contractors from non-compliant umbrella corporations.
In response to a query concerning the division’s dedication to creating the SEB, Shapps stated departmental priorities had now shifted, because of this of the Covid-19 coronavirus pandemic and the comparatively brief quantity of Parliamentary time left to ship on its plans.
“Given that we have spent more than two years of this Parliament fighting Covid-19, we have then seen the way that individual enforcement bodies are operating,” he stated, as detailed in a transcript from the session.
“It may be that with two years left of the Parliament, we are still able to address Single Enforcement Bodies…[although] we are more interested in ensuring that the bodies that are already in place are operating effectively.”
As alluded to by Shapps, Computer Weekly understands that one of the largest boundaries the federal government has confronted when making an attempt to create the SEB is that doing so would require laws to be handed and – because it was first introduced – there was inadequate Parliamentary time put aside to take action.
The authorities has come beneath rising stress since saying the SEB to offer updates on how its plans have been progressing, in addition to info on how the body could be funded, from numerous contracting market stakeholders.
As reported by Computer Weekly in May 2022, issues the federal government’s plans could have hit a stumbling block emerged after that month’s Queen Speech didn’t make any point out of an Employment Bill, which can have supplied a supply timeline for the SEB.
In a sequence of posts on social networking web site Twitter, the federal government’s director of labour market enforcement Margaret Beels lamented the dearth of references made through the Queen’s Speech to the SEB, describing it as a “real disappointment” as a result of it meant having to attend even longer for the mandatory Parliamentary time to make it a actuality.
Computer Weekly contacted BEIS, on Beels’ behalf, to see if she had any remark to make on the information that the SEB plan is now on hiatus and was instructed she could be unavailable for interview.
A spokesperson for the division, nonetheless, did provide the next assertion: “This government has a strong track record in supporting workers across the UK – from helping more people into work so there are now more employees on payroll than ever before, to raising the national living wage to its highest rate yet.”
The spokesperson added: “As well as working to ensure that existing bodies setup to protect workers’ rights are operating effectively, we have also backed a number of reforms including guaranteeing one week’s unpaid leave per year for carers, giving employees a right to request flexible working, extra redundancy protections for women, and a guarantee that hospitality staff get their tips in full.”
Even so, with recurring reviews of non-compliant umbrella corporations withholding vacation pay, taking unauthorised sums from contractor pay packets or unwittingly involving contributors in tax avoidance schemes, the federal government’s choice to shelve the SEB has not gone down effectively.
Crawford Temple, CEO of unbiased umbrella company compliance evaluation agency Professional Passport, instructed Computer Weekly of his disappointment on the authorities’s choice to not press forward with the creation of the SEB right now.
“I am not entirely surprised, as it was always going to be difficult to achieve. With plans shelved, it is more vital than ever that the government now demonstrates its commitment to stamping out non-compliance and malpractice in our industry,” he stated.
“It is shocking that [tax avoidance and disguised remuneration] schemes that lure workers into financial hardship when they can ill afford it are allowed to thrive. The government continues to drag its feet on taking visible enforcement action to find the perpetrators of these schemes and close them down.”
It has additionally been virtually a 12 months for the reason that UK authorities launched its name for proof into how the umbrella company sector operates and its findings are nonetheless but to be made public, continued Crawford.
“Quicker action, more resources and investment are needed if we are to clean up an industry that continues to attract negative headlines,” he stated.
Rebecca Seeley Harris is a former senior coverage adviser to the Office of Tax Simplification, who beforehand gifted the federal government a draft coverage doc to assist it expedite the method of regulating umbrella corporations.
Speaking to Computer Weekly, she stated it was “all very well for Grant Shapps to vaguely mention that the SEB is not going ahead”, however the authorities wants to provide some critical considered what to do in place of it.
On this level, she stated the logical factor to do could be to make the EASI liable for the umbrella sector, given its remit consists of defending the rights of company staff. However, the Inspectorate would wish further funding to cowl its further tasks and there could be legislative piece to kind there too, she conceded.
“EASI is really the only government body that can be responsible for the umbrella sector, and if it is going to be tasked with that, EASI would need extra funding,” she stated. “That would additionally rely on the extent of their actions, whether or not they’re there merely to coach or whether or not they tackle a extra energetic perform to penalise wrongdoing.
“They would be responsible for both the regulation of the umbrella company and the protection of the worker. This would involve regulation… or amending the Conduct Regulations,” she added.
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…. to be continued
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