Umbrella Companies

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1st April 2025

Umbrella Companies – Our Promise to You

There have been several media stories recently about some recruitment companies using umbrella companies that aren’t doing things the right way—especially when it comes to tax and pay. In fact, it is such a hot topic that in October’s budget the UK Government announced plans to clean up the umbrella company industry in a bid to recoup tax due to the HMRC.

So, what are umbrella companies, and how might they affect you as a temporary worker?

Umbrella Companies Defined

To put it simply – umbrella companies process the payroll of workers (PAYE) and are responsible for deducting the correct tax and National Insurance Contributions (NICs). These are sent to HMRC directly. They are often used in the management of temporary workers.

Whilst many umbrella companies are fully compliant, there are several rogue businesses out there – and it is often difficult to tell the difference. As a temporary worker, a dishonest umbrella company can erode your employee rights and, even worse, leave you with a tax liability.

Black African American Woman Break Relaxes And Reads The News On Her Mobile Smart Phone In An Industrial Factory.

What Is the Government Planning to Do?

It is estimated that half a million workers are engaged by umbrella companies in the UK, and non-compliance has significant revenue losses for the Government – which was why the launch of a new policy, ‘Tackling Non-Compliance in the Umbrella Company Market’, was announced last year.

Aimed at eradicating non-compliant companies, the policy legislates that from April 2026 agencies that outsource payroll operations to umbrella companies will bear full responsibility for any unpaid PAYE tax liabilities if they are found to be working with rogue providers. This puts the onus firmly on business-owners to do due-diligence on the companies they work with and take responsibility for non-compliance.

What is The Best Connection’s Position on Umbrella Companies?

At The Best Connection, we want to reassure you that we are committed to ethical practices and always putting your best interests first.

We only work with a very small number of umbrella companies—and only when absolutely necessary.

In fact, less than 1% of our workers are paid through umbrella companies. When we do use them, we make sure they’re FCSA-accredited, which means they’ve been independently audited and meet high standards in areas like pay, tax and employment rights.

We never work with any umbrella company that uses loan schemes or non-compliant tax models. These are risky and could expose workers to unexpected tax bills later.

We’re On Your Side

Our aim is simple: to make sure you get paid fairly, legally, and on time. Our temporary workers are paid directly through PAYE, which means full transparency, proper tax and National Insurance contributions, and all your employment rights protected. Our centralised weekly payroll is designed to keep things as simple as possible.

If you ever have questions about how you’re being paid—or if someone contacts you about using an umbrella company—please speak to your local branch or recruitment consultant who can provide you with guidance and advice.

Find out more about umbrella companies here: Working through an umbrella company – GOV.UK

To find the best temporary work in your area, please visit our website: Jobs | The Best Connection.

About The Best Connection

The Best Connection is one of the UK’s leading providers of temporary workforce solutions. For over three decades we have proudly served and supported our clients and candidates across multiple industry sectors, delivering our best-in-class customer service.