When speaking with recruiters it’s surprising how often we hear that “FCSA or Professional Passport take care of our compliance.”

Is this the appropriate response if HMRC comes knocking?

The corporate criminal offence of Failure to Prevent Criminal Facilitation of Tax Evasion is a burden of prove offence. HMRC expects to find evidence of due diligence and what they call “reasonable measures” to prevent the criminal facilitation of tax evasion if an offence occurs in a business.

So, the question is does forcing the umbrella companies in your supply chain to pay the £10-£20K annual investment to be accredited protect your business and offer value to them?

For the umbrella company, the answer is simple does paying the fee to be accredited get us more business? yes, or no?

For recruiters, it’s not that simple.  The criminal finance act pushes the liability of unpaid taxes away from the umbrella/individual and towards the facilitators in the form of recruitment agencies or end clients.

The Government considers that prevention procedures put in place by relevant bodies to prevent tax evasion from being committed on their behalf should be informed by the following 6 principles.

• Risk assessment
• Proportionality of risk-based prevention procedures
• Top level commitment
• Due diligence
• Communication (including training)
• Monitoring and review

An umbrella accreditation audit typically consists of an initial review of policy and procedures which is followed up annually.

The outsourcing of your compliance responsibility to an accreditation body is unlikely to satisfy or meet HMRC’s guidance threshold or be looked upon all that favourably.

We know that HMRC has 14 live investigations under the criminal finance act, and they are looking at up to 40 opportunities to use the legislation with labour supply chains considered a high risk area.

Most recruiters will already have met some of the guiding principles through their existing procedures but when it comes to training and monitoring a third party like Umbrella Check can offer real value.

Our Approach

The Umbrella Check approach begins with remote staff training to promote a demonstrable culture of awareness around what constitutes an offence, what to look out for and what the consequences are if reasonable measures are not in place.

Once the awareness culture of the business is in place Umbrella Check offers a monitoring service that focuses on the tax compliance of umbrella companies with ongoing and spontaneous checks as well as employment law checks.