‘There is nothing wrong or inappropriate for any employer, including the Government to employ contractors at any level of the civil service, if done properly, for the right reasons and where those concerned pay appropriate taxes. We would like to remind the Government and those who are criticising these employment arrangements, that freelance contracting work is undertaken by thousands of workers up and down the UK and is a legitimate and valuable way of working that benefits both employers and employees, and generally the competitive elements of the UK economy, which are recognised as necessary for recovery and growth. The key issue is compliance and all stakeholders in the supply chain are responsible for engaging correctly and appropriately.

I hope that if anything these cases remind policymakers of the important contribution of contractors and freelancers and the flexible workforce as a whole, to the UK economy, whether it be in the public or private sector. Too often the Government adopts a ‘one-size fits all ‘solution to the sector which varies in range from low skilled, low paid temporary workers to highly skilled, well paid professionals.

We need  to ensure the UK has a tax system that recognises the value and risks that freelancers and contractors take and rather than attacking any arrangements, we should be encouraging this flexible workforce as the key to helping the UK get back on its economic feet.’

In order to be accepted as an FCSA member, planIT Services were subjected to the FCSA Code of Conduct; a rigorous review process established by the Association, following extensive liaison with HM Revenue and Customs.

The Code is designed to be the most robust and comprehensive in existence, conducted independently by KPMG – one of the ‘big four’ accountancy practices. It is designed to demonstrate to Government, as well as freelancers and contractors looking for a service provider, that a company is financially stable, provides high quality professional services and operates to the highest standards of transparency and accountability. Compliance with the Code is independently assessed and validated by KPMG, with documentation deposited with HM Revenue and Customs at the end of the accreditation process.

Adrian Learer FCA, Managing Director, planIT Services Limited said:

‘I’m delighted that planIT Services has passed this rigorous review process and is now an FCSA member. We have always taken pride in our exemplary compliance standards and today is the result of years of hard work and ongoing investment in robust systems and qualified personnel.

‘With the implementation of AWR and the ever increasing legislative red tape within our sector, contractors and recruitment agencies need to know who they can trust. However, it has not always been easy to distinguish between those services providers who will remove your risk and those who will actually put you at risk.

‘Many compliance badges that I’ve looked into have, in my opinion, lacked true independence and professional standards and therefore are devoid of credibility. With the FCSA this is clearly not the case. Being an FCSA member puts planIT in an elite group of service providers with the highest standards of compliance, professional advice and financial prudence. planIT is pinning it’s colours to the FCSA mast; this is a badge that genuinely differentiates the best-practice market leaders from the rest.’

Stuart Davis, Chairman, FCSA said:

‘We are delighted that planIT Services has been able to meet the high standards required to gain membership of the FCSA and are delighted to welcome them to the Association, along with JSA Group. With these two new members and several more in the pipeline, FCSA is increasingly gathering pace towards our objective of ensuring our entire industry adheres to the strict standards of excellence set by the FCSA code.

‘At the FCSA, we take great pride in the quality of our membership, the independent nature of our Code, our representation of the flexible workforce with government, and the excellent professional services our members provide to tens of thousands of contractors across a range of sectors in the UK. FCSA membership is the badge of honour every freelancer and contractor should look for when choosing a professional services company to advise them. Only then can they be sure that they will receive a reliable, responsible and robust service.’

Like all other members, JSA Group had to subject themselves to the FCSA Code of Conduct, a rigorous review process established by the Association with advice from HM Revenue and Customs.

The Code is designed to be the most robust and comprehensive in existence, conducted independently by KPMG – one of the ‘big four’ accountancy practices. It is designed to demonstrate to Government, as well as freelancers and contractors looking for a service provider, that a company is financially stable, provides high quality professional services and operates to the highest standards of transparency and accountability. Compliance with the Code is independently assessed and validated by KPMG, with documentation deposited with HM Revenue and Customs at the end of the accreditation process.

Stuart Davis, Chairman, FCSA said:

‘We are extremely pleased that JSA Group has been able to meet the high standards required to gain membership of the FCSA and very much look forward to working with them to uphold those standards.

Gaining a member like JSA Group demonstrates to the flexible workforce and recruitment agencies the importance of FCSA membership for their service providers as it recognises them as being reliable, responsible and robust.

We hope that JSA Group’s acceptance to FCSA will inspire other service providers to seek to attain the FCSA standard as they see the many benefits of FCSA membership.’

Louise Rayner, Finance Director at JSA Group said:

‘Compliance is at the heart of our business and JSA genuinely believe that it is this, which with our focus on service, differentiates us from other providers. Our business is under more and more scrutiny with regard to employment status, Agency Legislation and Agency Workers Regulations (AWR) and we know that our contractor and agency clients alike, need to trust that their supplier is fully compliant.

‘JSA are accountants and we are proud of our qualifications and commitment to good practice. It is for this reason that we recently applied for membership of the FCSA and were subject to the KPMG assessment. This is not an easy certification to achieve and we have invested heavily in our systems, procedures and people in order to reach the required standards. Agencies and employers need to know that their suppliers are compliant and not putting them at risk of employment tribunals and HMRC investigations. I truly believe that this accreditation will make JSA “one of the few” and a business on which our partners can rely on and trust.’

Membership code of ethics

Chairman Stuart Davis made specific comment around the AWR elements of this latest revision,

“The Agency Workers Regulations (AWR) exists to help protect vulnerable workers and FCSA wholeheartedly supports this principle. FCSA believe that the spirit of the legislation to protect those that could be exploited has to be respected and understood. Workers that FCSA members support and employ are typically in the professional sphere and therefore some of the regulations need to be placed in context of this. Both Matched Permanent Pay (MPP) and Swedish Derogation (SD) models are covered by the FCSA code of conduct review process in alignment with guidance and law. There has been much discussion around AWR models and FCSA have taken the necessary time and advice to arrive at some key principles.

Swedish Derogation is not a loophole that avoids a person being provided with the rights conferred to them under the terms of the regulations.  The ability to employ a temporary worker and provide them with pay between assignments (PBA) was subject to extensive consultation and can provide significant benefits to temporary workers.

The regulations outline what terms need to be included within a SD employment contract and how any PBA should be calculated.  However, as with all of the regulations, they are currently untested from a legal standpoint.

As such, any person offering any type of AWR employment solution is basing their solution on the regulations, guidance and any advice taken.  Until case law develops to provide practical application to the terms of the regulation it would be impossible for any person or firm to provide any certainty that the solution they have adopted is “compliant”.

As a consequence, FCSA will support members offering either a match per pay or a Swedish derogation solution as long as the terms of the solution meet the requirements of the regulations.  FCSA will continue to keep all solution under review as case law develops.  FCSA will move swiftly to change their code to comply will evolving case law to ensure that all solutions approved by FCSA are of the highest standards.”

“The FCSA welcomes the Prime Minister’s initiative in commissioning legal advice on the AWR, but would counsel against them making any detailed changes at this late stage. Many of our members have spent time and resource setting up new systems to take account of the AWR and to make a change at this late stage would result in major chaos and inconvenience for thousand of freelancers and contractors.

A simple but effective move would be to change the 12 weeks qualifying period to the maximum allowed under the legislation which is 6 months.  This would mean a significant number of temporary workers would not fall within the regulations, thus reducing the burden on business.”

The FCSA Code of Conduct audit is the only review process governing companies in the contractor and staffing business service provider space that has been developed with support from HMRC. It is also the first review process for service providers that has the support of both REC and APSCo. In addition, the review is conducted by KPMG and HMRC receives copies of the final audit documentation.

The review includes:

• A challenging desk top questionnaire into business practices and performance
• An on-site audit to ratify claims made in the questionnaire
• An review covering aspects such as company directors, company finances, pre-employment checks, employment contracts and processes, expenses processing

Commenting on the process, Derek Kelly, Managing Director of ClearSky Accounting, said: “This is a very exciting time for ClearSky. I believe that the FCSA Code of Conduct represents the highest standards and best practice in our industry and by proactively presenting the results to HMRC it is also the most transparent.

“In the last few months alone we have seen several service providers in our industry go under, leaving thousands of contractors and freelancers out of pocket and facing potential fines from Companies House and this is not acceptable. These individuals and micro-businesses are the bedrock of our economy and they need security and protection. The FCSA membership demonstrates that we are committed to this and can give our clients the peace of mind that comes with that.”

Stuart Davis, Chair of the Freelancer and Contractor Services Association, said: “We’re delighted that ClearSky has opted to make the journey to membership of the FCSA. Our HMRC-recognised Code of Conduct holds companies to the most stringent standards of professionalism and accountability in our industry – so while demonstrating appropriate compliance and becoming a member is not easy, we at FCSA are committed to providing prospective members with all possible support and encouragement.

“FCSA accreditation boosts business, because it proves that a service provider is reliable, responsible and robust. With the flexible workforce growing ever more cautious about the companies they work with, adhering to the sector’s ‘gold standard’ is likely to attract new clients. We hope that in the coming months and years more companies choose to join us, because the Code underlines the credibility and maturity of our young industry.”

Stuart Davis, Chairman of FCSA said:

‘Our view is that if the umbrella provider ensures that its employees are paid at or above NMW after deduction of travel and expenses payments then they should not be affected by further HMRC scrutiny.

This again demonstrates the advantage of FCSA membership and adherence to our code which sets the highest standards for service providers and gives comfort to the clients of FCSA members who will not suddenly find the taxman unexpectedly calling because their service provider has not followed the law.

We welcome any moves by HMRC to look into any business models which have been constructed with the intention of operating contrary to the intention of Parliament. They have no place in the service provider industry as they do not help their clients in either the short or long term.’