Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions her Department has had on the potential impact of its forthcoming legislation on umbrella companies which engage temporary staff with the (a) NHS, (b) construction sector and (c) healthcare sector.

The government is introducing legislation to close the tax gap by making recruitment agencies that use umbrella companies legally responsible for accounting for PAYE on workers’ pay. This measure is expected to protect around £2.8 billion of tax revenue from being lost to umbrella company non-compliance across the scorecard period to 2029-30.

In relation to this measure, officials have engaged extensively with the representatives of the recruitment industry that provide temporary workers to these sectors and will continue to do so.

The government will set out full details of how this measure will operate, alongside draft legislation, later this year. As well as a consultation period, the government will support businesses as they prepare for the implementation of this measure by engaging with stakeholders before legislation is introduced into Parliament and publishing technical guidance for businesses that will be affected by it.