Pendragon Comply

Beyond the ordinary in delivering compliance 

Driving Compliance from the Back Office to the Boardroom

Why outsourcing contingent labour can save you time and money, it can also expose businesses to NIC, PAYE, and employment law risks. Due diligence can help ensure the integrity of the supply chain and help to make informed business decisions. Pendragon Comply can help you to protect your business by vetting the suppliers you have selected to provide labour supply for legality, legitimacy, credibility, employment and tax compliance. Our expertise and unrivalled knowledge in this field, means we are able to report our findings and leave you to decide on the level of risk you want your business to take on.

With all the recent news about non-compliance within the umbrella sector and the fact that it remains unregulated you should be very aware as an agency of your own liability risk when it comes to using umbrellas. If you run a PSL, how fair is your process, are umbrellas chosen just because they are the largest in size or because they offer incentives to your consultants and or business.

There have been revelations about salary skimming, holiday pay theft and in some cases non-payment of pension contributions. How do you know what is really going on within those umbrellas? Most agency compliance simply isn’t carried out to a high enough standard to keep up with those companies preying on your contractors. To pick up payslip skimming and other scams you need to at the very least to be checking.

Money flow (incorporates a number of financial and AML checks)

Payslip calculations

Holiday pay calculation and payment

Tax deductions

Director checks

HMRC payments


RTI (not reliable on its own)

Clone checks

you probably won’t catch these issues by checking RTI and automated payslip checkers.  So why Pendragon Comply? The team at Pendragon Comply has been completing Umbrella audits for over a decade. We currently audit c200 Umbrellas per year on behalf of our clients and have prevented them from being caught out by tax avoidance, skimming and scams and this has helped them to protect their contractors.

Whilst the only two umbrella accredited bodies FCSA and Professional Passport do their best to prevent, these practices, there needs to be additional checks carried out by you and or experts who understand the intricacies and nuances of the umbrella sector and those checks should be constant and consistent. Directors are liable for due diligence under Corporate Offense CCO legislation Corporate-Criminal-Offence.

Whether it is support to your existing compliance team or outsourcing the whole process under our discreet service, give us a call for a confidential discussion.

Why do You Need a Preferred Supplier List?

Best Value & Cost Saving

A preferred supplier list ensures that your suppliers provide the highest value in terms of pricing, quality, financial stability, and contract performance for your company. Your negotiation power will increase as you work with recommended suppliers, allowing you to negotiate better pricing and save money.

Better Decision Making

Data-driven decision-making is essential to effective procurement, and compiling a preferred supplier is the ideal way to go about it. Your list should make it easy for your company to acquire supplier information. The simplest method is to employ a digital e-sourcing system that connects internal and external parties while also providing up-to-date and appropriate data for decision-making.

Risk Management

A preferred supplier list can help control commercial and legal risks. It is one of the most significant benefits for a recruiter; If your suppliers share your values and are compliant with key legislation, you can decrease your exposure to certain regulations and help keep your company secure in the long run.

Book A Consultation

Supply Chain Due Diligence: 10 Things To Know

Here are some things HMRC list and want you to consider while conducting due diligence on your labour supply networks. The list is not exhaustive, and it varies depending on the type of business.

You must determine which checks are necessary, when they should be performed, and how frequently they should be performed. You should keep a complete record of all checks you perform. Inspections done solely with respect to your direct suppliers and customers may not be sufficient. It’s also necessary to think about the supply’s credibility, payment arrangements, and other factors. 


Make sure that the labour supplier is authentic and legitimate. You must know who your workers are, where they come from, how they are paid, and the legitimacy of all other arrangements.

Verify VAT Registration

Verify your labour suppliers’ VAT registration. If it can be demonstrated that you knew or should have known that transactions you made were connected to VAT fraud, you may lose your right to recover the tax you paid on these transactions.

Labour Supply

If the business fee is set too low, the supplier will struggle to pay its statutory tax requirements. It could be a sign of exploitation, modern-day slavery, or unlawful labour. So, make certain that your labour supply is commercially viable.

Slide 2

You must ensure that workers are paid at their contractual rate, complying with the NMW Act.

PAYE Accountability

If you provide workers or hire an agency or temporary workers, you must choose who should be in charge of PAYE. If you don’t account for your PAYE and NI contributions appropriately, you could be held accountable for them.

CIS Compliance

If you work in the construction industry, be sure you know the Construction Industry Scheme (CIS) terms. Failure to follow CIS guidelines can result in you paying CIS deductions, interest, and penalties. Plus, your gross payment registration may get cancelled by HMRC.

Intermediary Reporting

If you hire workers through a third party or outsource your payroll, examine the employment intermediary reporting and travel & subsistence arrangements to make sure they meet HMRC standards.

Slide 3
Tax Evasion

To avoid criminal assistance of tax evasion, be aware of the penalties for company failure. Organisations should consider putting in place reasonable processes to prevent anyone acting on their behalf from criminally facilitating tax evasion. Failure to do so may result in criminal charges and fines that are uncapped.

Off-payroll Regulations

Be mindful of your responsibilities in situations where an individual works through their own intermediary. As a public sector entity, you’ll need to determine whether the off-payroll working regulations apply and, if so, who should handle PAYE. If you work for a medium or large commercial or volunteer sector organisation, you must examine whether the off-payroll working regulations apply as of April 6, 2021.

previous arrow
next arrow

Lets us help you shape your compliance standards process

This is an opportunity for you to engage Pendragon Comply as a relevant and necessary partner in the effort to shape your compliance business processes into being an effective deterrent against non-compliance and tax avoidance schemes that would be harmful to your business, staff , long-term profitability and future sale. 

For many, this will require a profound transformation, for a few it will still be a journey of discovery. So why bother? Agency clients expect more from the service they receive. A basic job filling service doesn’t find them the skilled candidates they need to do the work but they still want a competitive price.

As an Agency you are expected to attract and place the right candidate in those jobs and to do that you must do right by the temporary worker or contractor. Exposing them to high fines because you enabled tax avoidance scheme operators to work within your business is on YOU. Lack of knowledge is not a defence in law. The power is held between the end client and agency and that is why it is so important to do the due diligence. Others in the supply chain like umbrellas, accountancy service providers and workers will then have a secure framework from which to operate within the rules.