Regulation of Umbrella Companies

Posted by Vector Resourcing on Wednesday 17 February 2010

Following our recent blog about recruitment law specialist Lawspeed urging recruiters to protect against Umbrella Company failures, the SPA (Service Providers Organisation) have hit back rejecting claims that the umbrella industry lacks regulation.

Adrian Marlowe, managing director of Lawspeed and chair of recruitment trade body, the Association of Recruitment Consultancies (ARC), claimed the umbrella industry is not regulated, with few checks and balances in place.

The SPA says differently, the following is taken from a recent article on Recruiter.co.uk:

"...The SPA says its code of conduct, launched last November, is designed to address several regulatory issues, including those relating specifically to HM Revenue & Customs payments and has already caused some members to leave the association because they are unable to comply.”

“The SPA adds that under the code, members undergo an independent review by one of the ‘big four’ accountancy practices, with the review documentation being voluntarily submitted to the HMRC - an act of open-book accounting and independent assessment that demonstrates their commitment to principled and transparent business practices.”

To read the full article please visit http://www.recruiter.co.uk

The SPA code of conduct is refreshing for the industry and certainly means that if you work under one of its members such as Giant or Brookson it will offer you some protection, however for anyone who chooses to work though an Umbrella Company who are not a member of the SPA, there still remains a lack of regulation.

As a recruiter we are limited in what we can do to help our contractors, but we are very careful about which Umbrella Companies we work with. Although we do not recommend any particular Umbrella Company, we can offer advice on the most popular and the services that they offer.

If you have any concerns or would like further advice, please contact me on 01892 771447 or email en@vector-uk.com

Emma Nicholson, Contracts Manager