Umbrella companies defend their reputation

The Service Providers Association launched a code of conduct last November that was designed to address several of the regulatory issues, including specifically those relating to payments to HMRC. Because of this new code some members have been forced to leave the SPA because they could not comply.

All members of the SPA now need to be independently reviewed by one of the 'big four' accountancy practices. The review findings will then be voluntarily submitted to the Revenue.

SPA chairman, Stuart Davis said that it was wrong to state there were no checks and balances in the industry. The SPA accepted that there was a need for more regulation and worked with the HMRC and a broad range of industry stakeholders to come up with an audit framework that worked independently to encourage best practice and transparency throughout the sector. Our new code is an ideal example of how self-regulation can work effectively and it gives people full confidence when they use our members' services.

However, with Albany entering administration last week, has the code gone far enough to help recruiters carry out risk assessment on intermediaries?

Kevin Green, the chief executive of the Recruitment and Employment Confederation believes that the SPA's work has been encouraging and he looks forward to seeing greater transparency in the umbrella industry.

Recruiters will soon need to start planning for the implementation of the Agency Workers Directive and will want to ensure they partner with reputable umbrella companies. Is self-regulation of umbrellas still going to be the answer or should HMRC take over the responsibility?

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