Umbrella Company Services in Scotland
Umbrella companies have historically provided contractors with an instant company structure under which they can start their contract immediately. They work on the basis that once you have found a contract, the umbrella company signs the contract with the agency or end user, and takes care of all the paperwork and compliance issues associated with running the company.
Due to recent high profile coverage of a major victory by HMRC over a recruitment company and bearing in mind the comments of the UK government chancellor in his Autumn 2014 statement, Clarity no longer offers the service of an umbrella company structure as an alternative to the personal service company. We believe that the government will imminently (and perhaps retrospectively) stop tax relief from being claimed on reimbursed business expenses when they are paid via an umbrella company, and this alone makes the umbrella option at least unviable, and at worst dangerous.
The government is also concerned at the growing use of overarching contracts of employment by employment intermediaries (umbrella companies), which allow some temporary workers to benefit from tax relief for home-to-work travel expenses that is not generally available to other workers.
For these reasons Clarity will only offer the Personal Service Company option to its contractors.