FCSA is an independent industry association which has been founded to set the standard for companies providing services to the professional freelance workforce and give this vital community a voice.
 

Membership and Code of Conduct Summary

If your organisation is considering joining FCSA then please take a moment to review this summary. Please contact us if you have any questions or areas requiring clarification and the full code of conduct is freely available here for subsequent download.

  • What services does it cover?

The FCSA regulate providers of limited company accountancy services and employment solutions (previously known as umbrella providers).

  • What is different about the FCSA code?

Members are required to comply with the code of conduct set out by the FCSA. This code sets a very high bar for compliance (highest by far in the industry). In order to become a member applicants are independently reviewed by KPMG (desk top audit and an onsite audit) (a leading accountancy firm) and the results and whole files are submitted to HMRC as part of an agreed process to show compliance.

Members are required to undergo a further audit annually to show ongoing compliance with the code and again the files are sent to HMRC as part of an agreed process.

  • Who created the code?

The founder members of FCSA developed the very detailed code of conduct but with input from:

  • HMRC
  • CBI
  • KPMG
  • APSCo
  • REC
  • How does the red/amber/green colour coding work?

Questions in the code of conduct questionnaire are colour coded to highlight the relative importance of the conduct or compliance under review.

Red = all members must be able to show compliance is already in place

Amber = compliance must already be in place or the member must show efforts are being made to ensure compliance will be in place shortly.

Green = compliance is preferred but not compulsory.

  • How many questions are there in the code of conduct documents and what are the areas covered?

The code of conduct questionnaire is currently 189 questions split into 3 principle sections:

  • Section 1 covers areas of conduct and compliance that must be met by all members:
    • Background and financial standing
    • Identity and right to work in the UK checks
    • Handling of complaints
    • HMRC compliance
    • Professional ethics and integrity
  • Section 2 covers area specific to employment solution providers:
    • Take on procedures
    • Over-arching employment contract
    • Ongoing compliance
    • Expenses
    • VAT
  • Section 3 covers areas specific to limited company providers
    • Take on procedures
    • Expenses
    • Provision of information
    • IR35
    • MSC best practice
    • HMRC enquiries
  • Can anyone join?

Yes, however to join the applicant must be able to show they meet the levels of compliance and service required by the FCSA as set down in the code of conduct.

Requirements for all members

  • What financial standing and background checks does the FCSA carry out and why does it complete these checks?

The FCSA reviews the following areas:

  • Company structure and the structure of any group or associated companies. This is to ensure that there are no hidden companies providing aggressive or offshore tax structures. All FCSA members must be UK based and comply with all UK tax legislation.
  • The directors and management of the company. This is to ensure that no personnel involved with the decision making in the company has been banned from holding the position of director.
  • The latest financial accounts of the company. All FCSA members must have a minimum financial strength to protect the freelancers that they represent and agencies that send funds to them. It is important that members are not using funds that should have been set aside to pay freelancers or HMRC to pay other debts.
  • The latest audit report for the company. This is to ensure that the auditors have not raised any concerns when they audited the company’s financial affairs and is an additional check to those completed as part of the FCSA submissions.
  • Regulated activities are employment solutions and limited company advisory services. This is to ensure that companies cannot submit part of their business to FCSA regulation leaving other areas exposed to bad practice and implying these other areas are covered by FCSA.
  • Staff qualifications. All FCSA members must employ staff with appropriate qualifications to manage the finances of the company.
  • VAT schemes. FCSA members are not permitted to use any alternative VAT schemes such as the use of flat rate VAT registration as a means of generating undeclared income. Flat rate VAT is a scheme in place to simplify the VAT activities of small independent businesses and regulations are in place to control which businesses may register. Bulk or pre-configured registration for the scheme by a service company indicates the business is prepared to manipulate HMRC regulations.
  • Business website and marketing materials. It is important that all FCSA members are clear, honest and forthcoming with information provided to freelancers.
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