With the introduction of the Criminal Finances Act 2017 and additional laws aimed to eliminate the facilitation of tax evasion, having a dependable Preferred Supplier List (PSL) is now of critical importance. If you do not have a PSL you can trust to refer your candidates to, your business, managers and directors are at risk of unlimited fines and custodial sentences.
It is a common misconception to think that having a Preferred Supplier List (PSL) in place is enough to ensure you are referring your candidates to trustworthy accountancy and payroll providers. However, this is not true. You must have a careful and thorough inspection process in place for every business on your PSL and they must be able to prove to your recruitment agency that they are operating in full compliance with HMRC and are in no way encouraging or promoting tax evasion.
The PSL Compliance Checklist
Churchill Knight & Associates Ltd has created an 8 question checklist for recruitment agencies. Please answer the questions below about the payroll provider on your PSL.
1. Are they accredited by Professional Passport – a leading industry regulator that audits accountancy and payroll providers to ensure they operate in full compliance with HMRC?
2. Do they offer incentives that are not significantly higher than other companies (removing potential risk from the Bribery Act 2011)?
3. Do they have a 100% compliance record with HMRC?
4. Is the entirety of their business set-up in the United Kingdom, and not linked to countries overseas?
5. Are they experts in the latest legislation and able to provide you with support when required?
6. Are they well established in the industry?
7. Can they provide important and useful services for your candidates such as insurance, pension advice and IR35 assistance (either through their own company or approved partners)?
8. Are they professional and strict with your candidates’ expense claims?
Hopefully you have answered yes to everything above. If you have answered no to one or more of the questions, your PSL is at risk of being non-compliant and therefore your recruitment agency is at risk of an HMRC investigation.
Facilitating tax evasion is a serious crime
HMRC has introduced the Criminal Finances Act 2017 and additional new laws with the intention of targeting those who facilitate tax evasion. Therefore, if any of your recruitment consultants refer a candidate to a tax evasion scheme, your business could be on the receiving end of an unlimited fine and managers and directors could obtain custodial sentences. Even if a consultant refers a candidate to a tax evasion scheme in secret and against your recruitment agencies referral policy – you can be found guilty. Therefore, you cannot afford to have an unreliable PSL and your referrals must be managed responsibly.
Book your free consultation now – before it’s too late
Churchill Knight & Associates Ltd works closely with hundreds of recruitment agencies and provides a leading contractor accountancy, CIS payroll and PAYE umbrella service to their candidates, in full compliance with HMRC.
We understand that there is a lot of important information to take on board regarding the new laws and as a result, our specialists are encouraging you to give us a call and arrange a free consultation either on the phone or in your office.