Former England cricket captain Michael Vaughan OBE has become an ambassador of the Payroll Compliance Authority (PCA), a not-for-profit accreditor in the outsourced payroll sector. With long-awaited sector legislation in the pipeline for 2026, Vaughan’s support marks a prominent new voice for the PCA to advocate for workers, recruitment firms and compliant umbrella companies.
Vaughan is best known for serving as England cricket captain from 2003 to 2008, including leading a celebrated Ashes win in 2005 after which he became an OBE. Since retiring as a player, Vaughan has become a respected cricket commentator and involved in a variety of business interests as a board member, investor and ambassador. His ventures have spanned many sectors including finance, notably as ambassador for a consultancy that protects the payslips of elite sportsmen and women.
Vaughan says: “I strongly believe in the unequivocal right for everyone to bring home the salary they have worked hard to earn without risk. This is why I want to use my profile to help the PCA draw attention to the challenges faced by workers and hiring businesses in the UK due to the activities of non-compliant umbrella companies.
“I’m still learning about the sector but what I really understand is people. People don’t like change and it’s not easy to bring change to a whole industry, but that is why the PCA was created, as a not-for-profit responding to an urgent need to stamp out worker exploitation and protect recruitment firms. It’s a great campaign to be invested in.”
Umbrella companies handle the payroll function on behalf of recruitment firms and businesses up and down the country for approximately 700,000 temporary workers. Without regulation, fraudulent activity in the sector has been rife including incorrect tax deductions, pay skimming, and withholding of holiday pay.
HMRC estimates that £500 million was lost to such disguised remuneration tax avoidance schemes between 2022 and 2023. Where umbrella companies have failed to pay the correct taxes out of payslips, workers risk receiving large, unexpected tax bills from HMRC down the line.
The PCA is independent and the only not-for-profit accreditor in the field, offering law-abiding payroll companies membership following a rigorous and ongoing audit process, carried out independently by a reputable accounting firm. PCA-accredited umbrella firms are transparent, ethical, and compliant with all tax and employment legislation. Non-compliance leads to suspension and ultimately removal of accreditation.
Paul Newsham, CEO of the PCA and a Chartered Accountant of over 30 years, says: “We are delighted to have Michael acting as an ambassador for us. He is well-known for being outspoken and his voice will help to increase awareness among workers and recruiters of the illegal activities occurring so they can remain vigilant and protect themselves.
“With legislation on its way and yet to be finalised, now is a critical time to share the challenges faced by individuals and businesses working in or with umbrella companies.”
At the Autumn Budget, the government announced that it will introduce legislation to transfer the responsibility to account for Pay As You Earn (PAYE) and other tax deductions from the umbrella companies that employ the workers to the recruitment agencies that supply the workers to an end client. If a business is not using an agency, the responsibility will sit with this end client business. In addition, in relation to employment rights, the government has tabled an amendment to the Employment Rights Bill to define umbrella companies and allow for their regulation within the Employment Agency Standards Inspectorate’s remit.
Making recruitment firms legally responsible for ensuring that PAYE and other tax deductions are properly accounted for is expected to tighten due diligence and ongoing monitoring practices around engaging umbrella companies and thereby improve compliance within the market.
Newsham adds: “We welcome the news that legislation is on its way, however, we believe the scale of the issues faced in the sector have been underestimated and that the details of proposed legislation so far will not drive a significant improvement in compliance.”
Picture credit: Alamy
- Payroll Compliance Authority
