Calls for compliance after agency faces large HMRC claim under MSC rules
Posted Apr 13, 2011
A contractor services organisation has called on recruitment companies to make sure they are compliant with industry legislation, following news that one agency and its director are facing a £10m Transfer of Debt notice under the Managed Service Company rules.
The Freelancer and Contractor Services Association (FCSA) says that this current case shows the real dangers of non-compliance and not managing risk correctly.
The Association suggests that agencies add value for their contracting workforce by only providing preferred supplier lists (PSLs) of umbrella and accountancy providers that are fully compliant with relevant industry legislation.
Under the MSC legislation, third parties (including recruiters and their directors) can be found liable for debts incurred by individual contractor limited companies, if they have been 'actively involved' in providing services to companies which have been caught by the rules.
Commenting on this current case, Chairman of the FCSA, Stuart Davis, said
"This need for appropriate due diligence is the basis of the FCSA Code of Conduct...
"...The Code demonstrates that FCSA member businesses are operating compliantly with all relevant legislation, including MSC legislation, and therefore deals with the Transfer of Debt risk directly."
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