Guidance on working through umbrella companies

Umbrella trade body Prism has published an updated fact sheet in conjunction with the Low Incomes Tax Reform Group and endorsed by The Chartered Institute of Taxation to help contractors navigate the umbrella working model.

This follows some recent criticism of the operating practices of some umbrellas, and changes to the IR35 rules in the private sector.

Crawford Temple from Professional Passport and founder of Prism said: "Since the introduction of the new Off-Payroll legislation in the private sector we know that many more contractors will be working through umbrella companies and many will be new to this type of working.

"Umbrella companies can be confusing, particularly for lower-paid workers. Often, they aren't very transparent about what they do, but there is also a lot of misinformation which gives them a bad name – even the ones that take the welfare of their workers very seriously.

"In conjunction with the Low Incomes Tax Reform Group, we thought it would be timely to provide workers with some clear and independent information to help them better understand how an umbrella company works and what to look out for so that any problems can be averted and avoided."

The guidance is available here:

Working through an umbrella company