date posted: 22-01-2015

In response to a recent Channel 4’s Dispatches programme that included a focus on Umbrella companies, we wanted to put your mind at rest regarding the way Sterling operates.
The programme highlighted how some Umbrella companies are not acting compliantly. We do not support the way in which they operate. Sterling fully supports HMRC’s efforts to expose these uncompliant companies.
The method which the programme referred to is called an Elective Deduction model (EDM) model. To summarise, this model classifies a worker as being PAYE and so subject to the usual tax and National Insurance deductions, therefore not having to complete self-employed tax returns. However, this route is deemed to be outside of certain employment rights such as National Minimum Wage and Agency Worker Regulations. This model offers the worker very little protection and is not something Sterling or many other legitimate Umbrella companies advocate.
Sterling Umbrella doesn’t operate any form of salary sacrifice scheme and never pay below the National Minimum Wage. Furthermore our employees receive all the statutory benefits any employee would be entitled to. We hope that any scrutiny of the industry will put the spotlight on these companies that do fail to act compliantly and in the best interests of the contractor who are giving the whole industry including compliant providers like Sterling a bad name.
Sterling Umbrella has recently been audited by HMRC including a full review of our Expense procedure and they were more than happy with how we operate. This approval along with our Professional Passport accreditation (the most widely recognised stamp of approval in our industry) and being an APSCo Affiliate member can only serve to demonstrate to you how compliant we are and how seriously we value the needs of our employees.
To protect yourself, make sure you use a compliant provider that is backed by industry accreditations such as Sterling Umbrella, and don’t be drawn in by offers or figures that seem too good to be true, as most likely they will be.
If you have any queries or concerns please don’t hesitate to contact us and we will be more than happy to assist you.

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