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The Compliance Barometer:Recruitment leaders have their say
Introduction
Steve Wortley, Outsauce
Survey results
Andrew Webster, Outsauce
Lifting the lid…
An anonymous survey to uncover:
• Attitudes• Impact• Approach
Spoiler: HMRC and unscrupulous recruiters do not get off lightly…
Recruiters - uncertain, but not unwillingSnapshot:
Our key discoveries:
• Agencies are keen to ensure compliance• but are unclear of their obligations…• …and how to achieve them• Doubts too over enforcement
Supply chain compliance
• Do you currently take steps to assess and manage compliance risk through the recruitment supply chain?
Supply chain compliance
• Do you currently take steps to assess and manage compliance risk through the recruitment supply chain?
Varying levels of thoroughness
Our contract reviews are checked by our solicitors and advisers
We review contractual terms, implement credit checks of relevant entities, carry out full checks of workers (right to work), references,
security checks etc.
We are contracted to the NHS, therefore our compliance assessments are extremely thorough in every area of our
business
…Or a wish to share the load?
(Behind closed doors it’s clear that recruiters want end clients to play their part…)
Due diligence
Who should undertake compliance checks of service providers?
• 2 to 1 say agencies should conduct
their own due diligence, not external consultancies
• Two steps forward… no SLAs?
What about IR35?
A widespread lack of understanding…
IR35 is complex, but recruiters are expected to make a decision on it and we are not qualified to do so.
A message for HMRC
Only 18% think HMRC is doing enough at
present to clamp down on non-compliant claims…
So how should non-compliant expense claiming be tackled?
Respondents were very forthcoming with their suggestions…
A message for HMRC
HMRC should give very clear advice in plain English
HMRC puts the burden of interpretation on agencies, but reserves ultimate judgement – and hands out fines if you
have interpreted the information incorrectly
The only way to tackle the problem is to have more accountant auditors, working on behalf of HMRC
reviewing companies’ expenses
A message for HMRC
Nobody should be allowed to claim expenses without a receipt (especially umbrella employees). The practice is
giving agencies and umbrella companies a bad name and will lead to this method of working being made illegal.
Fines. Big ones. Published.
Pensions auto-enrolment
Our survey said…
• Doubts over clarity• A lack of preparation• No desire to bear the cost…
A conclusive consensus
63% say a bureaucratic burden
4% consider it effective
22% suggest it’s both…
The bigger picture:
Is recruitment industry legislation generally effective in removing
unscrupulous practices?
It’s clearly unclear…
Are there any areas of legislation from the last government that are clear? No – too much ambiguity. When ministers say we'll
let the courts sort it out you can tell they are not interested
IR35. We need a simple process for recruiters to identify compliance, yes or no. We are
not accountants!
EAR2003 is overly complex
…it still seems to be written in lawyers’ speak
A double whammy?
It creates more (of a) burden for reputable compliant agencies while the unscrupulous ones remain
Some agencies spend a lot of time, effort and money to make sure they comply whereas others do not comply with everything
and get away with it as no specific checks are made
Unscrupulous agencies will continue to avoid or play the system – while law abiding agencies will be punished if they
are only a fraction non-compliant
…Or a necessary burden?
There is a certain ambivalence and arrogance that regards legislation as an irritant rather than a
way of improving things for contractors
Government acknowledgement is vital
The government should embrace and recognise how recruitment agencies are valuable to the growth of the UK's
workforce and stop giving them so much red tape
Why isn't the government using the recruitment industry to help people get back into work instead of going at it half-cocked
themselves? After all - we're the experts!