What are the NEU’s key policy concerns in this area?
These arrangements drain funding for education away from schools while paying supply staff much less than those directly employed by local authorities and schools. Several umbrella companies seek to minimise the amount of tax paid. Limited company arrangements couldalso be a vehicle for tax avoidance. The union is also concerned at the risk of individual supply staff being deprived of statutory rights or facing HMRC action due to tax or payroll errors.
What is the NEU stance on umbrella companies and limited companies?
The NEU believes that supply staff should be directly engaged by the school/academy or local authority as set out in our (LINK) Alternatives to Agencies (A2A) toolkit. We have substantial reservations about umbrella or limited company arrangements, and advise members against entering into them wherever possible. HMRC states that “Compliant umbrella companies ensure that the correct tax and National Insurance Contributions are paid. However, HMRC is also aware of tax non-compliance within this sector, which will be contributing to the wider tax gap.”