Furlough and the Push for Better Regulation of the Umbrella Sector


The past 12-18 months has been one of the most challenging periods for the world as a whole and also a challenging time for our own UK economy with the pandemic coupled with further economic uncertainty following Brexit. This has had a knock-on effect on people’s stress levels, heightened anxiety and uncertain times lie ahead for many agency contractors in our sector.

The agency contractor, arguably the backbone of the UK economy, has shown amazing strength and resilience throughout the pandemic which will lead the resurgence of the contracting sector in the coming months.

Coronavirus Job Retention Scheme (CJRS) and Furlough

In March 2020 when the pandemic had a firm grip on the world, umbrella companies had to work around the clock to seek clarity for their agency contractors to see how the CJRS would apply to them.

The original guidance had clearly not taken into consideration the way umbrella companies work, causing confusion and dismay among the sector and a lot of agency contractors in desperate need of support.

While also leaving umbrella companies without clarity from HMRC, if umbrella companies attempted to calculate furlough pay incorrectly it could leave them open to being non-compliant with the scheme which would cause even further distress for our agency contractors.

In June, after the government had confirmed its intention to cut the grant available through the CJRS from August, a high proportion of umbrella companies ceased furlough pay altogether from this point on. The costs associated with accessing the scheme meant most umbrella companies would struggle to afford support to their employees.

Lack of Regulation

One thing which is fairly unanimous across the industry is the concern relating to a lack of regulation and how misunderstood the agency contractor industry is by the government. This has resulted in confusion and difficulty with agency contractor applications for the CJRS in the last year.

The government has confirmed regulation is on the way, but like any red tape it could still be some way off before this actually comes into effect, with the repercussions of COVID-19 and other issues likely to be higher on the national agenda.

We believe in working with recognised industry organisations like IPSE, REC, ASPCO and the FCSA to support and promote compliant umbrella companies while also pushing for more secure compliance practices in the sector to protect agency contractors and the industry we operate in.

Be a Contractor Today

Evolve CS Group is a first-class umbrella contracting company provided by top-rated professionals.

Contact us at 0203 744 1229 or email us at hello@evolvecs.co.uk and start your journey today with Evolve CS.