Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what steps his Department is taking to stop agencies using umbrella companies to manage the payroll function of companies within the construction industry.

Umbrella companies have been a part of the UK labour market for many years and, when operated responsibly, provide a useful conduit through which payments, including tax, can be made. As such, Her Majesty’s Revenue and Customs (HMRC) are not taking steps to stop agencies using umbrella companies to manage the payroll function of companies within the construction industry.

However the Government is concerned at the growing use of overarching contracts of employment by employment intermediaries such as umbrella companies, which allow some temporary workers to benefit from tax relief for home-to-work travel expenses that is not generally available to other workers. The government published a discussion document on 16 December 2014 inviting representations from interested parties to inform potential future action