Professional Passport has been at the forefront of the drive for compliance across the umbrella sector for over 17 years.  We are proud of our record with no agency or end client suffering any loss through debt transfer action.

We have built a valuable network of relationships with agencies, end clients, contractors, and providers which allows us to hold our providers accountable against our detailed standards.

During this time, we have also seen many challenges, new ‘have I got a good idea for you’ schemes, and countless changes to legislation, often driving unintended consequences.  In many cases, the consequences have been predicted and forecast with clear warnings flagged up in the numerous responses made to Government via consultations and discussions.

This is why the Professional Passport standards are under constant review seeking to prevent those looking to exploit workers with dubious schemes from holding a position in the market and thriving.

Over this period, we also have worked closely with HMRC, and other Government departments, with a clear intention of raising the standards across the sector.

One message that has been clear and consistent over the 17 years is that all the efforts by operators in the sector attempting to drive up compliance cannot fully succeed without the right support and actions taken by HMRC.  We have always been vocal in our belief that effective enforcement is key to delivering on the mission to clean up the industry.

Today, we firmly believe that the umbrella sector is facing some of the highest levels of non-compliance.  But, it is also worth noting that this goes beyond the umbrella sector as we see many arrangements seeking to circumvent various layers of legislation and until fairly recently with little or no consequences.  HMRC’s name and shame list of tax avoidance operators is an important first step but more needs to be done.

Thankfully, there are real signs that HMRC is now becoming more active and seeking to develop tools that will help drive compliance up in the sector. We have been working closely with them on these and will be embracing the new developments as they are launched. We have had significantly more engagement in recent months with many proposals and developments being shared which is all very encouraging.  However, we need to go further.

Many recruitment companies are openly stating that they are being forced to accept companies onto their supply chain list that they would prefer not to deal with. The issue here is that if they failed to agree to certain terms, they would lose the contract as many others in the market would agree to their terms. We have, over our 17-year history, made clear that the role of enforcement in the sector is to level the playing field.  We are committed to supporting those who are seeking to apply the rules as intended and removing the commercial disadvantages that providers, agencies and end clients face against those who are happy to disregard the rules and go unpunished.

We are already seeing the power of the name and shame list being eroded as providers who are removed after 12 months still seem to have no action taken against them, other than perhaps a stop notice or being named on the list. We see these people attempting to re-enter the market under different guises which once again supports the argument that there are few negative consequences for them so they just start up again.

The announcement by The Chancellor at the Labour Conference announcing more enforcement officers is encouraging and a step in the right direction although with the extensive list of those who appear on the name and shame list should by now provide clear visible evidence that action must be taken against these providers to prevent them for doing business ever again.

Until HMRC uses all of its powers to severely damage these promoters they are failing to remove the incentives for these companies to exist.

The monies they make on the back of these arrangements are significant and unless this is recovered as part of the enforcement process, they will just carry on conducting their illegal business practices.

HMRC must realise that visible and effective enforcement has to sit alongside any compliance standards in the market to remove the commercial pressures faced by businesses and providers.

Legislation itself will not and cannot achieve compliance, which has been clearly evidenced through the sticking plaster approach that has existed for many years. It can be argued that the Off-Payroll Working rules were a key driver to the levels of non-compliance and boom of ‘have I got a good idea for you’ schemes entering the market.

This legislation herded many workers into a narrow field of operations and made the target market for the scheme operators significantly larger than they could have ever wished. The lack of visible enforcement has allowed these operators to thrive unhindered and recruit many into their field of operations with the promise of high returns, openly disregarding any rules that should apply.

Our message is clear and remains the same as it has been for many years, HMRC needs to support the efforts of those seeking to raise the standards with visible enforcement and significant consequences for those who disregard the rules.