Government signals Single Enforcement Body as dead in the water

The government has declined to say anything further about the Single Enforcement Body, in effect confirming that the entity to regulate umbrella companies is dead in the water.

Asked if equivocal comments by business minister Grant Shapps mean that the SEB won’t go ahead, a BEIS official responded to ContractorUK with an allusion to IR35 reform but said nothing of the body.

“This government has a strong track record in supporting workers across the UK -- from helping more people into work, so there are now more employees on the payroll than ever before, to raising the national living wage to its highest rate yet,” the official said.

'Existing bodies operating effectively'

Sounding aware that the SEB was mooted not only to regulate umbrellas, but also to amalgamate EASI, HMRC NNW and the GLAA, the spokesperson for the department for Business, Energy and Industrial Strategy (BEIS), added:

“As well as working to ensure that existing bodies set up to protect workers’ rights are operating effectively, we have also backed a number of reforms including guaranteeing one week’s unpaid leave per year for carers, giving employees a right to request flexible working, extra redundancy protections for women, and a guarantee that hospitality staff get their tips in full.”

In sharing BEIS’s statement with supporters of umbrella company regulation to decipher what it might mean, ContractorUK was told by contractors’ advisers that the silence about the SEB speaks volumes. 

One adviser pointed out that BEIS explained to them that a Single Enforcement Body would require new legislation to be drawn up, and got told such an exercise has not been allocated parliamentary time.

Another adviser who like ContractorUK pressed the department about the SEB was handed the very same statement, when they asked how the umbrella market ought to be addressed in the SEB’s absence.

'Make it easier to work out status'

The adviser, tax lawyer Rebecca Seeley Harris, was reminded by the business department that individuals and businesses have up-to-date guidance on employment status to draw upon.

Published in July 2022, the guidance which the lawyer was referred to has received the endorsement of Margaret Beels, the Director of Labour Market Enforcement (DLME).

Beels told MPs in December that the government’s guidance on status will “make it easier for individuals to work out their own status whilst ensuring the employment status system remains flexible and continues to adapt to modern working practices.”

The DLME’s show of support for government guidance should please Andy McDonald MP, who is concerned about “widespread agreement that the discord [between employment and tax status] is unhelpful and creates gaps in which unscrupulous businesses can operate.”

'Have your fingers in three places at once'

McDonald also said he had heard that the three enforcement bodies which the SEB was going to swallow up, are “spread woefully thin.”

Speaking to MPs in her capacity as Labour Market Enforcement Director, Beels was much less enthusiastic about the government’s response to its employment status consultation.

“It is pretty heavy going,” Beels said. “Even the guidance to workers is quite tricky to follow. You almost have to have your fingers in three places at once.”

'Giving the guidance to my 12-year-old children'

Faced with Beels’ criticism, Mr Shapps told the House of Commons that the government’s aim is “to make guidance as clear as possible.”

And the business minister said he had his own private test which he likes to run to double-check that government guidance is using only plain English.

“I have had a habit of going through guidance, giving it to my then 12-year-old children and asking if they understood it,” revealed Mr Shapps.

“What you want to do with guidance is make it very clear and very readable and not overly wordy. Although I have not looked at that specific guidance, I am happy to do so.”

'Should be some law against that'

Ms Seeley Harris isn’t impressed that employment status guidance for individuals concerned about being employed or self-employed could be sense-checked by young teenagers.

“I'm sure there should be some law against that,” the tax lawyer and founder of ReLegal Consulting says. “It also doesn't say much for [Shapps’] own government departments which have been relieved of collectively £263m, for getting employment status wrong under IR35 using government guidance.”

Whether he was being serious or sarcastic about his kids judging the clarity of taxpayer guidance, Seeley Harris believes the attitude on display from Mr Shapps suggests his vow to look into the issue is something that the minister will need a reminder about.