Empowering the Freelance Economy

Are umbrella companies really exploiting contractors?

IT contractors are among those who need to be on top of umbrella company risks.
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Welcome back to the Freelancer’s Lunch where we scan the net for topical, inspiring and career-impacting videos and podcasts talking about matters impacting the freelancer, contractor, and founder communities.

In this week’s selection, you can listen to contractor and off-payroll accountant specialist James Poyser of inniAccounts on why some umbrella companies are still riddled with risks for contractors.

He outlines what to look out for and why in-demand IT contractors can be targets of dubious tricks like skimming.

For many IT contractors, umbrella companies are a necessary evil if the project or client is worth it. For others, signing up to an umbrella company or even one determined by a recruitment firm is a take it or leave it scenario. But one thing holds true, umbrella companies are not regulated.

Despite the HMRC being aware of the mini-umbrella company scandal there are those that claim incidents of foul play even with big umbrella outfits still going on today. With chatter of unused contractor holiday pay getting siphoned to offshore bank accounts, to skimming (payslips don’t add up) to even overcharging national insurance. These are just some of the risks that James Poyser of inniAccounts speaks of in this ITPro podcast.

“One of the challenges is the umbrella market is unregulated. And even the head of a professional body who represents umbrella companies has described it as the Wild West; it’s full of opportunists. And contractors for many umbrellas are seen as a commodity that needs to be exploited.”


Listen to James Poyser on the ITPro podcast here.

The opinions expressed in this podcast are not those of The Freelance Informer.

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