New Legal Powers allow HMRC to name promoters and schemes faster and this is the first of many announcements due out in the coming weeks and months
Whilst HMRC no doubt embellish some of their successes, their increased focus seems to be on letting us all know more about what our “tax dollars” are being used for. It is refreshing to see a change in the legislation which now allows HMRC to publicise these purveyors of misery and financial ruin but this can only be seen as a first step in the right direction there’s a long way to go.
Umbrella Regulation in itself that everyone is calling for is no “magic bullet“. In order for regulation to really work you need experts within the regulatory body working with the enforcement teams to police the laws. HMRC and BEIS do not have these experts inhouse and will need to look outside their inner circle of advisors. There is currently regulation within the Recruitment industry but that does not work as effectively as it should as BEIS are not ontop of their brief and fail to understand how far some commercial entities will go to gain an unfair and unlawful advantage. Unless the SEB (single enforcement body) is properly funded all the rest of the work won’t matter. I am not convinced this government is truly invested in closing all these loopholes and not to cast aspersions but there are some mired in these schemes themselves. Another indicator of lack of will is the Employment bill which has seen delay upon delay and the government say “we will bring it forward when parliamentary time permits” Are they for real!. Once again, the bill looks to have been kicked into the longer grass and will not be announced the Queen’s speech in May, so I’m given to understand by some of those in the know.
This new twist, however does provide a strong message for Agencies and End clients and that is get your house in order. If you get caught up in this naming and shaming because you’re using these types of schemes through Umbrellas that are on your PSL, it will leave a lasting stench and damaging effect on your brand, your staff, your stakeholders and your investors. CFO,s FD’s and MD’s you are responsible for compliance within your supply chain under the Criminal Finance Act 2017 and you will need to undertake regular reviews even if you only use Umbrellas with an accreditation, let alone those that don’t. This heightened compliance activity which includes HMRC using MSC legislation 2007 to investigate outside IR35 contractors and their Accountants is underway and in the lead up to summer, make sure you are not on HMRC’s letters or naming and shaming lists
If you’re concerned, as you should be; get in touch with Pendragon Comply in confidence or reach out to me directly for a free consultation. Our embedded compliance support teams are working with many agencies behind the scenes protecting their supply chains; thus protecting your contractors who enable you to earn the income your business needs to be successful. Ignorance and inaction are not an excuse in law.