Blogs

In October 2024, the UK government unveiled its latest measure aimed at addressing the rampant non-compliance within the umbrella company sector. 

The Autumn Budget 2024 has introduced a raft of fiscal changes that will reshape how recruitment agencies operate, particularly those relying on payroll companies.

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.

Read our interview with Cameron Newcombe about his first quarter as an Account Manager at Payme. 

The 2024 UK Budget has introduced several measures that will significantly impact the payroll and recruitment industries. From National Insurance cuts to changes in VAT registration thresholds, these measures are poised to affect employers, umbrella companies, the recruitment sector, and contract and freelance workers in various ways. Here's a comprehensive breakdown of the fundamental changes and how they might influence these groups.

Thanks to the actions of the All-Party Parliamentary Loan Charge and Taxpayer Fairness Group, the discredited Loan Charge has finally entered the public consciousness. It could prove as controversial as the Post Office Horizon disgrace. So, we look at what's been revealed and why it's caused so many people such misery.

2024 sees new tax laws applying in the UK. Here we look at what they are, how they’ll impact you as a recruiter, and how we can help you adapt to the changes.

It’s the time of year when our thoughts turn to a summer break – something that all contractors are entitled to. With new holiday pay regulations coming into force on 1 April 2024, we look at what they are and how they will affect recruiters.

With only weeks until the new financial year, this article examines what to consider when choosing an umbrella partner, how to remain compliant, and the consequences of not doing so.  

Start the New Financial Year Without a Hangover

The UK's financial year ends on 5th April, and a new one begins on 6th April. So, if you're running a recruitment business, you must organise your financial affairs and report all the details to HMRC to determine how much tax you will pay in the forthcoming year. 

We're delighted to introduce our Head of Sales, Daniel Burn. We had a fascinating Q&A session with Daniel to learn more about his previous experience and his plans for 2024. He provided some interesting insight into Payme and the upcoming opportunities and challenges in the recruitment industry.  

If your business manages numerous contractors who are eligible for the Construction Industry Scheme (CIS) you’ll need to be aware of some reforms which are due to happen in April of this year. Here we look at what those reforms will mean, and how using an umbrella service can streamline your contractor management.

The National Minimum Wage (NMW) was introduced in April 1999 to protect low paid workers from exploitation, without having a detrimental effect on employment or the wider economy. As of April 2023, the minimum wage is rising. 

We’re frequently asked why a contractor should be employed by an umbrella company as opposed to just working through the PAYE system. Here we look at the pros and cons of the two arrangements, find out what the differences are, and offer information on how to choose the right one for you, based on your personal circumstances.

The Criminal Finances Act (CFA) gained Royal Assent on 27 April 2017 and was designed to enable law enforcement bodies to tackle money laundering, tax evasion and corruption. Here we look at its importance in the recruitment industry and how recruitment agencies can ensure they operate in a risk-free manner.

It’s been just over a year since Sean Mackenzie joined Payme as our White Collar Sales Director, so we thought it was time to catch up with him and find out all about his first twelve months.

The freelance sector contributes hugely to UK GDP – in 2022 self-employed people added around £139 billion to the economy – that’s almost 6% of the total. However, employers that use sole traders may fall foul of HMRC’s strict tax rules. Here we look at why, what the implications for employers are and how they can alleviate any issues.

In the last few weeks we’ve received several phone calls from concerned recruitment agencies who’ve had letters from HMRC in which they’ve been given 6 months to stop using mini umbrella companies. Here we look at what mini umbrellas are, what’s caused this flurry of activity from HMRC, and what agencies and contractors should do if they’re involved with one.

From healthcare wearables to image-generating AI, technology is advancing faster than most of us can keep up with. However, when it’s applied correctly, technology can speed up the things we need in a hurry, ensure that processes and procedures are correct, and improve our lives. Here we look at the technology that we employ in order to serve you better.

The Freelancer and Contractor Services Association’s (FCSA) Code of Compliance Charter, states that: ‘All fees, margins, and charges must be explicitly and fully disclosed to contractors and freelancers before completion of any contractual relationship’. As proud members of the FCSA that’s something we’re in complete agreement with. However, some other, less scrupulous umbrella companies are less than transparent when it comes to their fees. Here we examine what you should look out for when it comes to choosing your umbrella company.

It might surprise you to learn that, unlike banks, building societies and insurance companies, umbrella companies are not legally regulated. You may ask why that is when they deal with millions of pounds of other people’s money every year, tempting rogue opportunists into illegal activity. Here we learn about accreditation and look at how trustworthy umbrella companies address the issue of compliance.

The Government’s ‘Call for Evidence: umbrella company market’ is now closed. In it ministers invited views from stakeholders on umbrella companies’ role within the UK labour market, and their interaction with tax authorities and employment rights bodies. Here we look at the result of the consultation and what action may follow.

The recruitment industry has faced some serious challenges over the last few years – first there was Brexit, then the COVID-19 pandemic and subsequent lockdowns, and after that came the Great Resignation, all leading to a fiercely competitive recruitment market, with recruiters having to work smarter as well as harder. Here we look at how, by outsourcing one crucial aspect of your recruitment business, payroll, you can not only help your contractors but also improve your own business’s prospects of success.

We’re delighted to welcome our new National Account Manager, Claire Martin, to the Payme team.

Here we look at Claire’s previous achievements, and learn what she has planned for her new role at Payme.

Welcome to the team, Claire. Tell us a little about yourself and your background.

Thank you, I’m very happy to be here! 

For the last 8 years I’ve worked for another umbrella company, first as a Senior Account Manager then as Associate Account Director. Prior to that I worked as an Employment Liaison Manager for a leading public service provider, helping to improve people’s lives through training, education and employment, and before that I was a recruitment consultant, specialising in the Engineering, Manufacturing and Technical Industries.  

Contracting can be an extremely satisfying way of making a living – contractors have the freedom to choose where and when they work and, for many, the variety of clients brings freedom and fresh challenges with every assignment. However, many contractors tell us that they’re worried about how the sometimes itinerant nature of their work will affect their ability to get a mortgage when they need it. Here we look at why they shouldn’t worry, and how partnering with a compliant, reliable umbrella offers them the reassurance they need.

We’re concerned that we’re seeing increasing examples of a particular type of tax avoidance scam recently. In this fraudulent activity umbrella companies entice contractors to sign up with them with the undertaking that their offerings are compliant, then change what the contractors have been promised without their knowledge, leaving them compromised and at risk of investigation by HMRC. We look into this dubious practice and show you how to avoid it.

If you already use an umbrella company to deal with processing your salary, taking care of your Tax and National Insurance contributions, and compliantly maximising your take-home pay, you’ll be aware of the range of work-based benefits they offer. What you might not know, however, is that some umbrellas go further than that, and offer support for contractors that goes beyond merely monetary and administrative. 

Here we look at how umbrella companies should be supporting contractors’ well-being too.

There are many abbreviations and acronyms in the world of umbrella companies, some of which can be confusing. Here at Payme we try to keep the jargon to a minimum, but occasionally you might have seen the phrases Agency Workers’ Regulations and Conduct Regulations abbreviated to AWRs and CWRs. These are a vital part of a contractor’s rights as an employee and it’s important that recruitment agents and end-clients understand them too. Here we look at what they are and how they apply to you.

In 2018 the Data Protection Act was introduced to control how your personal data is stored and used by organisations and businesses. It was the UK’s implementation of the General Data Protection Regulation (GDPR) and introduced ‘data protection principles’ to ensure that anyone storing or using your personal data has to follow strict rules. Here we look at what information we hold about you and how we go about keeping it secure.

The good, the bad and the ugly - What are the frustrations, what can we expect to happen - Please use the slide deck to help with the blog.  

IR35 Two Years On – The Good, the Bad and the Ugly

It’s been two years since the Government reformed its IR35 legislation for the private sector. This meant that the private sector was brought into line with the public sector in terms of who decides a contractor’s IR35 status. It hasn’t all been plain sailing, so we take a look back at the last couple of years, find out where we are now with IR35, and try to predict what will happen in the future.

Recruiters are often faced with a difficult choice about which umbrella company they partner with. Many umbrellas say that they offer prompt payment for contractors, and provide payroll solutions for recruitment agencies. What makes others stand apart from their competitors is the added value they can offer their recruitment partners – things such as contractor reward schemes, FCSA compliance, and high-quality training for recruiters. Here we focus on the latter, and look at how Payme can help you ...

Dean has been Payme’s National Accounts Manager for the past four years. Here we look at what he does and find out what he thinks will be the main talking points in the umbrella industry over the next 12 months.

All professionals, from engineers to healthcare workers, from IT specialists to teaching assistants, have to undertake regular training. 

It’s important to the financial health and productivity of an organisation, leading to higher quality work and longer-term commitment from employees, but it’s equally important in terms of personal development for the individual concerned. 

As a recruiter you’re the vital link in the recruitment chain, getting vacancies filled and finding people employment, but also enhancing the UK’s economy in these challenging times. 

The maximum State Pension in the UK at the moment is £9,628 per year. It’s well known that the UK ‘devotes a smaller percentage of its GDP to state pensions and pensioner benefits than most other advanced economies’ and, therefore, it’s important to have an occupational pension in place for when you retire.

2022 was undoubtedly a traumatic year for umbrella companies, with scandals, on/off reform proposals and technological difficulties at the highest levels. Here we take a look at what the coming year might bring for umbrella providers and the people who use them.

After a tumultuous time for the IR35 and off-payroll sectors during the last year, here we look ahead and try to predict what lies in store for white collar contractors in 2023.

With the recent news that two government departments, DEFRA, the Department for Environment Food and Rural Affairs, and the MOJ, Ministry of Justice, are facing tax bills from HMRC totalling £120 million due to inaccuracies in the government’s own Check Employment Status for Tax (CEST) tool, here we look at what’s gone wrong and what needs to change.

January is a great time to look back at your achievements over the last twelve months, and look ahead to what the New Year will bring. 

One really important thing you can do to ensure your continued prosperity over the coming year is to review your Preferred Supplier Lists (PSLs), to ensure that the umbrella companies you deal with are compliant and providing the best possible service to both you and your contractors. 

The government’s Department for Business, Energy & Industrial Strategy has recently updated its guidance for contractors regarding the information contained in their Key Information Documents (KIDS). Here, we explain what to look for in a KID and why they’re so important if you’re a white collar worker working through an umbrella company.

KIDs explained KIDs were introduced on 6th April 2020, and require recruitment agencies to tell the contractors that they recruit on behalf of end clients crucial information about their assignments.

In the light of a recent scandal involving a high-profile umbrella company, industry leaders are again raising the question of why the industry is not regulated along the lines of banks, mortgage providers and other financial institutions.

With the shocking news that an umbrella company has been found to be salary skimming, here we look at this unlawful and unethical practice and ask what impact compliance has on payroll.

We’re delighted to welcome our new Sales Director, Sean Mackenzie, to the Payme team. Here, we take a look at his past achievements and look ahead to his plans for Payme in the future. Sean, welcome to the team. Tell us a little bit about yourself and your background. My career started in the banking sector in 2005 with roles including Private Banking Manager with Child & Co and Relationship Bank Manager with the Future Williams and Glyn Team (RBS). These roles gave me a great opportunity to learn about the intricacies of finance, and I developed business, personal and commercial banking experience for over 12 years.

The Government defines an umbrella company as ‘a company that employs a temporary worker (an agency worker or contractor), often on behalf of an employment agency’. With increasing numbers of us now opting to work as contractors, here we take a look at the benefits of engaging with an umbrella company, and ask what reassurances they can offer.

In a surprise move in his first mini-budget, the new Chancellor, Kwasi Kwarteng, has scrapped the controversial and unpopular off-payroll legislation which previously meant that the responsibility for determining contractors’ IR35 status lay at the door of the end client. While some have welcomed the changes, others warn of a gaping hole in treasury finances as a result of this legislation.

A recent case in the Supreme Court (Harpur Trust v Brazel) has clarified whether a worker’s right to paid annual leave is accumulated according to the working pattern of the worker, or is pro rata.

The people on the payroll of a company or an organisation are the people who work for it and are paid by it.

‘Gloomy and More Uncertain’ reads the unflinching headline of an IMF report of July this year, which details the UK’s declining economy and predicts that UK GDP will fall to 0.5% in 2023, lower even than Mexico’s (1.2%). There are a number of well-documented factors at play in this scenario, including the ongoing Brexit situation, the effect of Covid-19 and the subsequent lockdowns, and now the war in Ukraine. This has all pushed up inflation to 9.1%, its highest rate in 40 years, with warnings from economists that it could soon rise to 13%.

There are now around 4.25 million self-employed people in the UK (Statista, June 2020) many of whom provide their services to clients through a Managed Service Company (MSC). However, after a 2019 civil case in the Court of Appeal (Christianuyi Limited & Others v HM Revenue & Customs), which questioned the definition of ‘involvement’, payme examines whether MSCs are a risk worth taking.

We would like to address the recent news from HMRC around a payroll provider who has a similar name to our organisation. For clarification, we are payme, an FCSA and Professional Passport accredited payroll provider. There is an organisation which is being investigated as a tax avoidance promoter, named PAYEme Ltd.