A complete ban on the use of umbrella companies in the UK is the only way to prevent the exploitation and abuse of agency workers, freelancers, and contractors, according to a new report from the TUC.

Umbrella companies are used by recruitment agencies to operate a PAYE (pay-as-you-earn) system for agency workers. In many cases, the umbrella firm will also employ agency workers, who become “employees” of the company. Freelancers and contractors also use umbrella companies to manage their pay and tax responsibilities.