Research by the Association of Independent Professionals and the Self-Employed (IPSE) has found that 61% of self-employed workers operating through an umbrella company believe there are no benefits to doing so.
The number of umbrella companies has grown since the reforms to IR35 in April 2021. According to IPSE, 69% of workers said their clients insisted they work through an umbrella company since the changes to off-payroll working came into effect.
Workers say they are dissatisfied with working under an umbrella company, with 80% citing the fact they have to cover the liability for Employer's National Insurance, and the Apprenticeship Levy, through a reduction of their day rate.
In the report, 70% of workers stated that they believed they had lost their independence and ability to work in the ways they wished since joining an umbrella company.
Andy Chamberlain, director of policy at IPSE, said:
"The fundamental problem here is that people are being forced into pseudo-employment relationships they do not want.
"Since the IR35 changes came in a year ago, thousands who proudly consider themselves self-employed are being pushed into umbrella companies under disadvantaged conditions, often without even a choice over which umbrella company they use."
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