With a rise in exploitation and non-compliance in the recruitment industry, it has never been more important for all links of the supply chain to work together and ensure a good working practice.
Since the IR35 reform, a number of contractors are now turning to umbrella companies for their payroll needs. Unfortunately, there has seen a rise in disguised remuneration schemes and bad practices amongst some businesses. A number of firms are actually tax-avoiding and deceiving contractors into signing up with them.
The new off-payroll reforms mean that the end-hirer becomes responsible for assessing a contractor’s IR35 status, however, it is thought that 55% of mid-sized companies still lack a formal IR35 payroll process. Some firms treat off-payroll compliance as a pandemic-related add-on and so aren’t taking it seriously.
The Positives
Despite this, there are a large number of organisations working under high compliancy regulations and correctly providing an excellent quality service to clients and contractors.
Knowing exactly who you’re working with and checking that your supply chain is operating compliantly, should not be ignored.
There are a number of steps that can be taken to check the credibility and compliance of parties in the supply chain, as well as adding specific requirements to contracts.
Here are a few checks that can be carried out to identify if you’re working with a compliant or non-compliant supply chain:
- Take a look at your recruiters – Are they in a good financial position? You could run a credit check and investigate their accounts. If a recruiter has been audited, you can feel reassured that the figures will be accurate. You could also check for issues such as conflicting business interests, any previously failed businesses or financial difficulties
- Check a recruiters contract of employment, insurance and level of cover
- Ask your recruiters for the names of the intermediaries they work with, so you can run similar checks on those
- Check if they hold a recognised compliance accreditation certificate?
Compliant umbrella companies offer a legitimate contractor management solution that gives an individual the benefits of employment, whilst working on a variety of assignments. A good umbrella firm is usually open and transparent about its dealings with workers. They will often provide a clear contract of employment that explains how you will be paid, what deductions there are and why, how expenses are paid and how holiday pay is calculated.
Non-compliance can be costly in the long run, therefore, having an efficient and reliable compliance process is vital.
Click here to read our previous blog about supply chain compliance.
Alternatively, if you have any enquiries please don’t hesitate to contact us on 01252 863700 or info@epayme.co.uk
We are proud to be accredited by Professional Passport. They are the largest independent assessor of payment compliance and the only insurance backed accreditation. You can rest assured that your payroll needs are in safe hands with us.
Source:
https://www.hrmagazine.co.uk/content/comment/knowing-your-supply-chain-post-ir35-reform