Agencies: Check your suppliers’ compliance status, they might be going on a spending frenzy…


15th June 2017

One of the hot topics within the hiring industry at the moment is recruitment agency compliance. Firms, particularly those operating across borders, are looking to find ways to ensure they remain on the right side of the law which can prove challenging when looking to navigate an often tricky regulatory landscape. However, as if it wasn’t enough ensuring that your firm stays within tax legislation, it’s now also critical to ensure that the suppliers you’re using are fully compliant.

Recruitment agency compliance

With the global crackdown on non-compliance gaining momentum, it should be a priority for firms to ensure that they are operating within tax regulations in whichever country they’re based. And one story from Essex this week highlighted exactly that.

Quality Premier Services (QPS) – formerly Central Payroll Specialists – was an umbrella payroll firm which, earlier this month, was found guilty of tax fraud of truly staggering proportions. The organisation, which was run by three members of the same family, pocketed more than £45m of money owed to the taxman from its recruitment agency clients and spent it on funding their own lavish lifestyles. However, while you may have heard about the odd director redirecting clients’ money in the past, this particular incident has to be seen to be believed.

Major haul

The three directors each owned at least four supercars including a Ferrari F12 Berlinetta, Rolls Royce Ghost and a Lamborghini Aventador along with a series of mortgage free properties both here in the UK and in Spain. At one director’s home officers from Essex Police and HMRC discovered numerous items including designer clothing, Rolex and Audemars Piquet watches and deposit transfers for a Las Vegas casino which revealed he had deposited chips and foreign currency worth more than $1.5m during a recent trip. All of that from an individual who had declared his income as £19,256 for the tax years between 2010 and 2015.

Officers also found a notepad showing how VAT fraud for the organisation was calculated between the three family members, proving their involvement in the scheme, along with a fleet of other supercars, works of art and other high-value goods. They also found £55,000 in cash hidden within one of the aforementioned supercars. Tax records showed that one of the three directors paid £15,930 in tax between 2009 and 2015, while the other two had contributed nothing.

The brazen nature of this particular incident is startling, however unfortunately there are many suppliers operating outside of the law that are still under the misguided belief that they can somehow get away with it. The introduction of new legislation has meant that recruitment agency compliance should be a priority, and that means extending your checks out to your suppliers. Fortunately, in this particular case no contractors or other agencies were impacted, however many could be damaged by the illicit behaviour of their suppliers in the future without putting thorough checks in place.

We’ve set up our own survey in conjunction with Camino Partners and if you’re at all uncertain over the status of your own suppliers then we’d recommend completing it to ensure that you’re not putting your organisation – or the contractors you place – at risk. And if you’d like to talk to a supplier that is fully compliant with tax legislation around the world, then speak to the experts before it’s too late.

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