FCSA backs umbrella company regulation consultation

The Freelancer and Contractor Services Association is backing the new consultation on umbrella companies -- but says the government must learn from its IR35 experience.

Chris Bryce, chief executive of the FCSA, told ContractorUK that he “broadly welcomes” the 58-page document, including its three main options which “each have their merits”.

But Mr Bryce stressed that “above all”, policymakers must avoid “another IR35-type situation where the legislation itself is confusing and hampers…the flexible workforce.”

'Reconsider Single Enforcement Body shelving'

The ex-contractor was alluding to the off-payroll rules shifting the IR35 decision and liability from worker to client, with the effect that clients became too risk-averse to hire contractors.

“I also believe that for any legislation to be effective, [former business minister] Grant Shapps will have to reconsider his recent shelving of the Single Enforcement Body plans.”

In the consultation, the government says it “previously committed” to the SEB, and “delivering this commitment is subject to there being sufficient parliamentary time…to legislate.”

'Pleased'

The consultation adds that the Employment Agencies Standards Inspectorate “could be incorporated” into the Single Enforcement Body, “if the government decides to legislate for this in the future.”

“FCSA has been advocating for regulation of the industry for a long time, and we’re pleased to see the government bringing forward proposals,” Mr Bryce told ContractorUK, adding:

“The three main options each have their merits but will require careful consideration as they all also give rise to potential issues. FCSA will be consulting with our members, stakeholders, and the wider industry – including workers – to ensure that any legislation brought forward is as effective and workable as possible.”