{"id":1897,"date":"2017-06-15T08:46:10","date_gmt":"2017-06-15T07:46:10","guid":{"rendered":"http:\/\/liquidfriday.co.uk\/?p=1891"},"modified":"2017-06-15T08:46:10","modified_gmt":"2017-06-15T07:46:10","slug":"45-million-vat-scam-highlights-importance-watertight-psl","status":"publish","type":"post","link":"https:\/\/www.liquidfriday.co.uk\/45-million-vat-scam-highlights-importance-watertight-psl\/","title":{"rendered":"The \u00a345 million VAT scam that highlights the importance of a watertight PSL"},"content":{"rendered":"

\"psl<\/p>\n

A family of fraudsters have been jailed for a total of 27-and-a-half years after being found guilty of stealing more than \u00a345m from the public purse in the largest payroll VAT fraud uncovered in the UK. <\/span><\/p>\n

Geoffrey Copp, 55, his son Joshua Copp, 24, and brother Andrew Copp, 51, used the money to fund lavish lifestyles including luxury cars, property and art. They were sentenced at Wood Green Crown Court on 9 June. Geoffrey was jailed for 10-and-a-half years, Joshua received 8 years and Andrew was handed 9 years. \u00a0<\/span>Read more about the case<\/span><\/a>\u00a0<\/span><\/p>\n

Used by agencies in good faith<\/b><\/h3>\n

The trio ran Central Payroll Specialists (CPS), which was later rebranded as Quality Premier Services (QPS). <\/span>The companies were used by recruitment agencies in good faith to manage the wages of thousands of temporary workers. But over the course of three years, the Copps did not pass the VAT they received from agencies to HMRC. Although the fraud itself was VAT, the mechanism used to payroll the workers was umbrella. <\/span><\/p>\n

John Chaplin, Executive Director of business advisors Ernst & Young said: <\/span>\u201cThis fraud clearly shows the dangers of not checking that your supply chain is compliant. \u00a0A simple check by any of the agencies using this business would have highlighted that their declared VAT returns came nowhere near matching the turnover of the business and could have uncovered the fraud much earlier. \u00a0This type of case reinforces the already poor reputation that the temp supply market has in some quarters and so it\u2019s no surprise that more and more agencies are undertaking even fairly basic checks before deciding to do business with their suppliers. \u00a0It\u2019s not the responsibility of agencies to do HMRC\u2019s job for them but I wonder how many of the ones involved in this case have come under closer scrutiny as a result and wish now that they\u2019d paid a bit more attention?\u201d<\/span><\/i><\/p>\n

Having faith in your suppliers is great, but it must have a foundation in facts and evidence. The QPS case shows once again that unfortunately there is a dark and corrupt corner of the industry which no recruitment agency (or legitimate umbrella provider for that matter) wants their business to be associated with. Above all it highlights the need for agencies to set stringent criteria for their PSL and ensure that the umbrella companies they deal with have been properly vetted.<\/p>\n

So how do agencies do this?<\/b><\/h3>\n

The easiest way for recruiters to be assured of the integrity of their PSL is to only use umbrella companies who are <\/span>full accredited members <\/b>of the <\/span>The Freelancer and Contractor Services Association (FCSA )<\/span><\/p>\n

Members are independently audited against the association\u2019s robust <\/span>Code of Compliance<\/span><\/a> on an annual basis. The assessors are regulated accountants and lawyers and are proven experts within the field.<\/span><\/p>\n

To ensure total transparency, copies of all documentation and audit findings are sent to HMRC as an integral part of the selection and review process. In short, the compliance and ethical benchmark is set very high.<\/span><\/p>\n

Look for the orange logo<\/b><\/h3>\n

We asked Julia Kermode, Chief Executive of the FCSA, to comment and she said: <\/span>\u201cWhile there are some cases of bad practice amongst a minority of businesses which have grabbed the headlines, there are also a large number of highly compliant organisations working ethically and correctly to provide a high level of service for its clients and contractors. The challenge comes in identifying a compliant company you can trust, sound in the knowledge that it continues to work within the rules. \u00a0There are an alarming number of recruitment firms that don\u2019t have time to do even basic checks, but this case highlights the importance of investing the time in your PSL. FCSA can help as we set extremely high standards for our Accredited Members to adhere to, and they are independently tested for compliance by regulated accountants and solicitors every year. \u00a0In short, we do all of the compliance testing so that you don\u2019t have to. \u00a0A word of caution though; it is only FCSA Accredited Members that are tested for compliance and entitled to use our orange logo, our associate members are not tested and use our blue logo.\u201d<\/span><\/i><\/p>\n

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\"FCSA<\/p>\n

REC Recommendation<\/b><\/h3>\n

The\u00a0Recruitment & Employment Confederation (REC)<\/a><\/span>\u00a0advises its own members to use only FCSA member companies. In fact all umbrella companies must be members of the FCSA before they can be granted REC business partner status.<\/span><\/p>\n

The REC\u2019s CEO Kevin Green confirms: \u201cWe are happy to recommend to all REC members who use or are looking to use a third party supplier of contractor accountancy or umbrella services, to use FCSA compliant members to minimise their risk\u201d.<\/span><\/i><\/p>\n

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Checklist for a watertight PSL<\/b><\/h3>\n

As a recruitment business, you have a right to carry out due diligence and demand transparency when you are putting together your preferred suppliers list.<\/p>\n

As well being fully accredited members of the FCSA, at Liquid Friday we give our agency clients access to the following:<\/span><\/p>\n