Companies seeking to become members of recruitment industry body ATSCo will now have to pass new compliance checks which have been devised with HMRC.

Following the implementation of recent legislation,
recruiters can now be held liable for contractors' unpaid tax and national insurance if such debts cannot be recovered from contractor service providers.

The new ATSCo checks are aimed at mitigating the added risk the new rules pose to recruitment companies who do business with contractor service providers.

The annual reviews will check that applicants who provide accountancy and umbrella company services comply with current tax and employment legislation. The Government has increased its focus on the contract worker market in recent years. Most recently, it has launched a consultation looking at the rules relating to travel expenses claimed by umbrella company contractors, which could result in an additional debt transfer risk for staffing companies.

Staffing companies can then refer to the ATSCo website to check which contractor service providers have passed the checks.

Marilyn Davidson, Director, ATSCo, said:

"The risks of non-compliance for providers of tax and employment related services to contractors has increased significantly, and the introduction of debt transfer rules has heightened the risk for staffing companies transacting business with these suppliers."

"These checks will give staffing companies a significant measure of assurance that service providers in the contractor market are operating in accordance with the law."