Contractor UK carries a response to a reader’s question on whether or not umbrella companies have to register with one of the supervisory bodies in the UK. It says that interpretation of the regulations suggests that this is not necessary in practice, as government guidance sets out that umbrellas are exempt. However, for own peace of mind, it advises one refers to the section ‘Payroll businesses that do not need to register’ in the government guidance. That guidance says that “if you’re a payroll services provider to a third party, you’re not an accountancy service provider for the purposes of the Money Laundering Regulations if you” –
- provide software or hardware service support for payroll data processing, as long as you do not analyse or prepare any financial information;
- pay invoiced service fees to self-employed people, umbrella companies, partnerships or other corporate service providers;
- operate as a body like an umbrella company or a managed service company and carry out payroll functions for employees who are working on assignments for an end-user client;
- provide recruitment or human resources management services and carry out payroll functions as a small part of your main business activity (for example, you might be an employment business that supplies or manages temporary or contract workers).