Umbrella company users 'could benefit from IR35 replacement law'

Umbrella company users may be affected by any replacement laws for IR35.

Any replacement for IR35 legislation will need to ensure that "unscrupulous" employers are not able to avoid their obligations, an expert has claimed, which could interest umbrella company users.

Mark Lee, writing for Fav Stocks, has highlighted the fact that the abolition of this regulation is likely to result in its replacement by other laws attempting to achieve the same goal.

He said that any new law should not motivate self-employed contractors to adopt personal service companies, as this was the practice the original IR35 attempted to prevent.

It is also important that self-employed contractors are not made liable for the same tax as employees, he claimed.

Mr Lee said: "This would be very unfair as contractors have no protection under employment laws and are not able to build up a contribution record for earnings related benefits."

Kevin Green, chief executive of the Recruitment and Employment Confederation, recently suggested that the employment market is looking positive for contractors, as sectors such as construction and engineering are experiencing rapid growth.