We reported a few weeks ago that the PCG had changed previous policy and set up their own Umbrella Company in conjunction with Parasol called Quality Umbrella or PCG (QU).
Previously they had always advised IT Contractors to set up limited companies.
They received some criticism from Barry Roback, the Chief Executive of Contractor Umbrella Company JSA in Shout99.
He reckoned that it would make it more difficult for them to lobby the Government on behalf of contractors, one would presume in the IR35 and other areas.
Better Represented
Rob Crossland, Managing Director of Parasol Ltd, commented that “far from detracting from the PCG’s ability to represent the freelancing community, the provision of an Umbrella Service will enhance their ability to represent the UK’s flexible workers. Providing approved quality services which are well managed and fully compliant will enable PCG to represent a community which is much wider than a perception of only representing limited company contractors, and begin to lobby effectively for a more intelligent view on flexible employment law in the UK and Europe”
Crossland continued “With a UK requirement for around 14 million flexible workers, much needs to be done to recognize and support the status of flexible workers in a legislative environment which is largely focused on permanent employees”.
Confusion Reigns
Parasol’s PCG (QU) Project Manager, Jon Harris, comments “You need only look at the range of contractor bulletin boards to see the confusion in the contracting community about how you can and cannot be paid, and the liabilities and obligations which are involved in making decisions about business operation methods. The aim of the PCG (QU) is to provide a safe, reliable solution – one that PCG could rely on being provided by an organisation committed to compliance, high quality service and ongoing development and which would give agencies, end users and contractors the confidence they needed in choosing to work through an Umbrella service”.
The Reasoning
The reasoning behind the PCG's decision appears to be that they were missing out on a major section of the IT Contracting profession. The market had spoken for itself and some were choosing limited companies whereas others chose to be in Contractor Umbrella companies.
The PG appear to have taken the attitude that the more IT Contractors they have as members (and the Quality Umbrella package gives them membership) the more influence they would have with the Government and Government departments.
Representation
It also means that those IT Contractors who want to go down the Umbrella route now get representation. The danger for them always was that if the PCG were only lobbying for Limited Company contractors then Contractor Umbrella Company members might miss out and decisions might get taken which were against their interests.
The PCG were always going to partner with a contractor Umbrella Company that was extremely safe. The last thing they would want would be Government legislation that scuppered a whole load of their members and that appears to be the reason they have decided to partner with Parasol, which, incidentally, was set up by IT Contractors and is still run by one of them.