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All Umbrella Companies Are Equal
AUCAE is a resource site set up to address issues of non-compliance within the umbrella company industry. Working with HMRC we have tried to ensure that our published guidelines are compliant with current UK tax and employment legislation and any partners who provide advice for the site, sit on a number of HMRC and Treasury consultative committees. This means that we are in a position to help shape future policy for the industry.
Over the last 15 years the sector has grown enormously thanks to the increased demand for flexible workers, which is great for contractors, but which has also led to confusion surrounding take home pay, compliance and future tax liabilities. Promises of 80%, 90% or even 95% take home pay are backed up with 'opinions' from QC's and guarantees that the scheme is compliant with UK tax law without saying which tax law (tax guidance currently runs to around 14,000 pages!).
AUCAE was originally formed to support compliant umbrella companies, to work with HMRC and the Treasury to create a level playing field for umbrella companies and to provide a valuable resource for both recruiters and contractors. However, as the industry changes with new legislation coming into force regularly, we decided that it would be advisable to provide a comprehensive resource for contractors to help them make an educated and informed decision on which umbrella company to choose.
Please note there are tax avoidance scheme providers, who label themselves as umbrella companies, who are putting contractors and recruiters at risk of financial penalties from HMRC; their marketing targets the unwary and is often slick and seemingly credible. HMRC are fighting a constant battle against tax avoidance but, conversely, they will not approve a compliant umbrella company so it is left to the industry to advise wherever possible.
So AUCAE have carefully put together a set of "Guidelines" that all compliant umbrella companies should work to in order to satisfy HMRC.