Following Unite’s call to ban ‘exploitative’ Umbrella companies from working with NHS Trusts, Danbro Executive Chairman, Damian Broughton responds by saying ignorance remains on how these solutions actually work.
He told Recruiter: “All of these ways of operating have to account for employer’s NI, which, at some point, is taken off the gross rate that is agreed with a worker. Even if a worker is a full-time employee, the NHS trust still has the cost of employer’s NI to be added to its agreed rate, to show the total cost to the trust.
“NHS Improvement says that it wants to encourage the use of PAYE mechanisms. Compliant umbrella companies operate the most transparent PAYE mechanism in an efficient and cost-effective manner. The transparency can sometimes cause confusion, as every penny is accounted for in information that is given to the worker.
“In addition to the transparency, many of the advantages of working for large organisations are given to workers who operate through umbrella companies, such as private medical insurance, life insurance, sickness cover and discount-buying schemes,” he said.
“There are some umbrella companies who do not operate compliantly, and we applaud HMRC’s efforts in stamping these practices out. We encourage Unite to focus its comments on non-compliant umbrellas rather than calling for a blanket ban on the whole sector, which provides an ideal solution to thousands of workers who understand, and prefer to work in, this manner.”
