Umbrella companies are only part of the IR35 problem

The government consultation issued on 6 June 2023 entitled ‘Tackling non-compliance in the umbrella company market’ is now closed and I suspect we will see some tax changes in this area announced in the autumn statement to be made in November 2023.

It is expected the tax changes to be announced will be aimed at curtailing the abuse by some umbrella companies by the placing of more responsibilities on agencies that generally supply workers to umbrella companies. Those powers are rumoured to include the requirement for the agency who placed the specific worker with the Umbrella company to take the responsibility to check they comply fully with the tax rules and that they may be held liable for any failings. These rules may be extended to include provision to recover underpaid liabilities from directors of the agency personally if the agency itself cannot meet the claim.

The issue...