Umbrella Contractors Loop Hole to Close

Following a recent HMRC consultation looking at how some umbrella providers are using a loop hole in the legislation to boost the expense claims for their workers; amendments to the rules will come in to effect in January 2011 to prevent this action.

HMRC released a consultation earlier this year after they became aware that a number of umbrella providers were using a loop hole in the National Minimum Wage rules to allow excessive expenses claims.

Where this was in operation it meant that many workers were being paid a salary below the National Minimum Wage and the provider was using the expense claims to bring the overall income in line with NMW. HMRC confirmed that was never the intention of the NMW rules and made clear they would take steps to prevent this from continuing.

They have announced that the rules will be amended from January 2011 preventing this practice from continuing.

We would like to confirm that Professional Passport audited and approved umbrella providers have never operated such schemes.

Please use the following link to view this article in full:

https://www.professionalpassport.com/pdfs/Contractor_Intell_August_2010.pdf

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