APSCo Umbrella Compliance Guidance

Many contractors work through an umbrella company to minimise their financial and tax administration. Likewise, working with compliant umbrella companies eases the compliance burden on recruiters. However, recruiters and umbrella workers need to be aware of non-compliant engagement models being marketed and to reiterate the importance of completing basic due diligence on new providers.

This 10 Step guidance piece gives an overview of the main compliance issues and risks our members need to be aware of:

APSCo Guidance on the Criminal Finances Act 2017

From 30th September 2017, there is a criminal risk for recruitment companies utilising non-compliant umbrella and management companies and those with lax policies for overseas contractors. The Act will make companies criminally liable if they fail to prevent tax evasion by either a member of their staff or an external agent, even where the business was not involved in the act or was unaware of it.

Supplier Compliance Questionnaire

This compliance questionnaire is to be completed by Suppliers (such as Umbrella Companies) delivering services to Employment Businesses in the United Kingdom. 

Umbrella company contractor compliance flow chart

This flow chart gives an overview of the main compliance issues that you need to be aware of during the placement process for umbrella company contractors.

Conduct Regulations Opt-Out Agreement

This Model Opt-Out Agreement is for use by APSCo members only. This Model Opt-Out Agreement is for use by limited company (either umbrella company or personal service company) contractors when wishing to opt-out of the Conduct of Employment Agencies and Employment Businesses Regulations (“the Regulations”).

This agreement is correct to the best of APSCo’s knowledge at the time of publication. APSCo can take no responsibility or liability for the use of this agreement, or for any decisions, or the consequences of any such decisions made by members or their contractors with regard to opting out of the Regulations.

Should you have any concerns or queries regarding the use of this document, please contact APSCo’s legal helpdesk on [email protected] or by calling +44 (0) 203 117 0910.

APSCo Umbrella Company Compliance FAQs

GOV Links

GOV.UK Guidance - Reducing the risk of using an umbrella company who operates a tax avoidance scheme

GOV.UK Guidance - Warning for agency workers and contracts employed by umbrella companies (Spotlight60)

GOV.UK Guidance - Current list of named tax avoidance schemes, promoters, enablers and suppliers