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First Payroll STM Ltd
2nd Floor
17 Hanover Square
Mayfair
London
W1S 1BN

Admin/Payroll Tel: 0845 520 1500
Support/Sales Tel: 0333 666 1510
General Enquiry Fax: 0845 520 1510

Contact First Payroll

Services for companies

Services for workers

Copyright © 2017. First Payroll Services is a trading name of First Payroll STM Ltd, Registered in England No. 09758425

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Put away the brolly

February 5, 2016

For some time a contentious issue in the area of payroll and recruitment, it seems the Umbrella Company could soon become a thing of the past thanks to restrictions travel & subsistence expenses, and on particular types of salary sacrifice arrangement.

 

 

The umbrella model was in poor health even before the consultation on the T&S restrictions began back in 2015. Barely remarked upon - but nevertheless present in the finance act - was the restriction on expenses being offset through PAYE on an ongoing basis from April this year, if the payment model in question qualifies as a ‘salary sacrifice scheme’. 

 

Due to the current Umbrella model commonly being a salary sacrifice scheme, it stands to reason that something will have to change: The alternative is that umbrella companies repostiion themselves as nothing more than an outsourced PAYE employment model or payroll bureau. 

 

This still has the advantage of (in the former scenario) employing the workers directly under their own PAYE and taking on the employment and insurance responsibility rather than leaving this to end users or agencies. Time will tell whether this approach and the reduced benefits are enough to ensure survival.

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