Compliance is absolutely key for FPS Group. You may notice that we talk about this topic a lot in our materials and articles to the point of sounding like a broken record. However yet another recent example of umbrella company fraud again highlights the importance of reiterating this fundamental compliance message.
Geoffrey Copp, 55, together with his son Joshua, 24, and brother Andrew, 51, have been jailed for stealing £45 million while running their umbrella payroll operation. The family ran Central Payroll Specialists (CPS), which was later rebranded as Quality Premier Services (QPS). The trio have been convicted with conspiracy to cheat the public revenue and conspiring to conceal, disguise, convert, transfer or remove criminal property between February 2012 and December 2015.
QPS did not pay the VAT they received from the recruitment agencies to HMRC and the involved individuals proceeded to spend this money on lavish lifestyles including luxury cars, holidays and properties. QPS was declared insolvent in November 2015 and as a result a number of agencies had to pay their contractors directly, having already paid QPS.
The QPS case is obviously quite an extreme example but it does show just how important it is for recruitment agencies to work with trustworthy, compliant and credible umbrella company payroll providers. It is clear that there continues to be a small number of umbrella providers in the market whose attitude to compliance and law leaves a lot to be desired. It is increasingly a case of when not if regarding these operators being found out and being made to pay. These providers are quite simply putting recruitment agencies that are utilising them and their contractors at huge risk. Firstly there is the obvious risk of agencies having the rug pulled out from under their feet, leaving them high and dry without a supplier. The chances of agencies being left out of pocket in this scenario would be significant. Worst still however is the chance that a supplier’s reckless behaviour may leave an agency and even its contractors at risk of large fines or even prison time.
Established in 1994, FPS Group is the industry's most trusted and reliable umbrella solutions provider. We are the only government regulated umbrella provider.
In order to become a regulated entity, we have to do the following:
• All Directors, key members of staff and associated individuals are checked to ensure that they are fit and proper to undertake regulatory activity (qualifications; police checks; experience)
• Client funds ring fenced, separate to our main trading account
• Client Account must be reconciled and hold a letter from the Bank confirming it is for the benefit of the client and not the funds of FPS.
• Compliance Officer and Money Laundering Reporting Officer must be appointed
• We must demonstrate our compliance through:
o Adherence to anti-money laundering legislation
o Organising and controlling internal affairs in a responsible manner
o Promoting high ethical standards
o Putting appropriate internal controls, policies and procedures in place
o Applying independent audit and internal compliance procedures
This is different to all other umbrella providers, as the industry is entirely unregulated. Most umbrella companies will take contractor funds in to their own beneficial ownership, their processes and procedures don’t have to be audited and their directors can be appointed without relevant police checks or verification of their suitability to run a payroll company.
FPS Group therefore have an exceptionally strong and credible compliance position within the overall industry. To find out more about how FPS Group can help you please contact our team on 0800 634 4848 today.