Connecting to LinkedIn...

Blank

STATEMENT BY APSCo FOLLOWING REED TAX LIABILITY CASE

STATEMENT BY APSCo FOLLOWING REED TAX LIABILITY CASE

UMBRELLA COMPANY COMPLIANCE

The recent tribunal decision not to allow Reed’s appeal against a &pound158 million tax assessment has led to much press coverage and debate regarding the use of umbrella companies highlighting the need for staffing companies, umbrella companies and hirers who use umbrella arrangements, to review the terms of their contracts with umbrella companies and/or umbrella workers.

Ann Swain, Chief Executive of APSCo says : “While every member obviously has a responsibility to conduct their own due diligence, APSCo took the decision some time ago to assist members in that process by partnering with three compliance providers – the FCSA ( The Freelancer and Contractor Services Association), Professional  Passport and Saffery  Champness.  APSCo only admits umbrella companies as approved affiliate members if they satisfy the membership criteria of the FCSA or have passed the compliance audit standards of Professional Passport or Saffery Champness.  The compliance checks are stringent and members are urged therefore to utilise only approved APSCo affiliates. ”

Commenting on the tribunal decision, Stuart Davis of the FCSA says:  We would like to make clear that the FCSA independently reviewed compliance checks always review employment contracts to ensure that our members do not operate salary sacrifice schemes and that umbrella contracts are over-arching. We believe that the FCSA Code of Conduct is the strongest in the business and goes above and beyond all requirements. Its strength also comes in its review by one of the top four accountancy firms and submission to HMRC.”

Crawford Temple of Professional Passport says: “Our standards have never included auditing organisations operating salary sacrifice arrangements, similar to those challenged in the recent case, as these have been considered too high risk. The recruitment companies that rely on our audited providers are seeking low risk, safe providers and our audit standards reflect this fact. Professional Passport regularly reviews our audit standards with HMRC to ensure it is always aligned to HMRC current thinking and enforcement for the specialist provider market both umbrella and accountancy services.”

However, according to Simon Kite of Saffery Champness, the recent Reed judgement should not be interpreted as being the end of travel and subsistence schemes.  “We are aware that HMRC are scrutinising these arrangements more closely. As a result, dispensations can take longer to obtain and require higher standards of documentation. That said, they remain a legitimate and tax efficient arrangement that companies in the recruitment sector should continue to consider."

Tags:

Articles similar to

Articles similar to