The latest IT Contractor News from Contract Eye

Two companies involved in running a contractor umbrella scheme have been forced into liquidation in order to protect the public interest.

The two companies - Sunday Solutions Limited and Bradbury & Co. Limited - were involved in running the Sunday Solutions contractor umbrella company.

An investigation by The Insolvency Service found that the scheme was marketed as a partnership whereby all the tax liabilities of contractor clients would be collected on their behalf in a separate bank account until the tax was due. Many of the 1500 contractors who signed up to the scheme never had their tax paid, and as a result they personally remain liable for any unpaid liabilities.

The investigation identified over 100 bank accounts opened to facilitate the scheme. In addition, no Limited Liability Partnership names were ever registered at Companies House. The directors of the scheme also failed to cooperate fully with the investigation.

In ordering the companies into liquidation, Ms Registrar Barber said that whilst the companies do not admit the allegations of wrongdoing, they do not oppose the winding up, and that she was satisfied for all the reasons alleged by the Secretary of State that it was expedient in the public interest that the companies be wound up on grounds of public interest.

Investigations Supervisor Chris Mayhew commented:

"Anyone considering using an umbrella tax scheme needs to be confident that they are using a reputable company. The action taken in this matter sends a clear message: if you run a company that adopts unscrupulous business practices, we will investigate and where necessary take action to close them down."

Naturally, we recommend contractors read our Top Tips for choosing the best umbrella company as a good starting point.