The Employment Rights Bill, introduced by the UK government on 10th October 2024, brings sweeping changes to employment laws across the country. Described as the largest upgrade to workers’ rights in a generation, this bill aims to modernise employment practices and ensure that workers receive stronger protections.

In recruitment in recent years, umbrella companies play a big role in handling payroll for temporary and contract workers. They take care of things like tax deductions and ensure everyone’s following employment laws. But, it is important to understand that not all of these companies follow the rules. Some are involved in tax avoidance schemes that can put both contractors and recruitment agencies at serious risk.

When it comes to choosing an umbrella company partner, making an informed decision is vital for both contractors and recruitment agencies. The right partner can streamline payroll processes, ensure compliance, and provide a range of valuable services.

In recent announcements, HMRC has increased its vigilance in conducting spot checks on employment agencies to verify the compliance of their payroll providers. This heightened scrutiny aims to crack down on non-compliant umbrella companies, particularly those promoting dubious tax avoidance schemes.