SPA rejects claims that umbrella industry lacks regulation
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The Service Providers Association (SPA) has refuted claims that there is a lack of regulation of the umbrella services industry.
Earlier this week, Adrian Marlowe, managing director of Lawspeed and chair of recruitment trade body, the Association of Recruitment Consultancies (ARC), claimed the umbrella industry is not regulated, with few checks and balances in place.
But the SPA says its code of conduct, launched last November, is designed to address several regulatory issues, including those relating specifically to HM Revenue & Customs payments and has already caused some members to leave the association because they are unable to comply.
The SPA adds that under the code, members undergo an independent review by one of the ‘big four’ accountancy practices, with the review documentation being voluntarily submitted to the HMRC - an act of open-book accounting and independent assessment that demonstrates their commitment to principled and transparent business practices.
SPA chairman, Stuart Davis says: “It is wrong to claim there is a complete lack of checks and balances in place. Accepting the need for greater regulation, the SPA worked with a wide variety of industry stakeholders along with the HMRC to devise an independently audited regulatory framework – encouraging best practice and transparency across the sector. The code is a perfect example of how effective self-regulation can work and allows people to have full confidence when using our members’ services.
“Our industry is no more immune to the economic downturn and the problems it creates than any other, but the strict standards and legal guidelines included in our code of conduct provides reputable service providers with the opportunity to demonstrate their commitment to professional, ethical operating practices. We look forward to continue working with all relevant parties to ensure the right procedures are in place.”
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Readers' comments (5)
Tom Atkinson | Thu, 11 Feb 2010 2:30 pm
The SPA code is often talked about in magazine articles but it seems incredibly difficult to discover what it is.
Perhaps Recruiter could publish it so that informed comment could be made.
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Carolyn Walsh | Thu, 11 Feb 2010 11:09 pm
The SPA audit is a product sold by Lawspeed. How can it be independent when many umbrella companies are clients of Lawspeed?
HMRC was supposed to perform a statutory audit on all umbrella companies, but withdrew from this undertaking with a meek apology on the HMRC website last year.
HMRC must be the body which regulates umbrella companies, and until then no-one is safe.
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richard | Fri, 12 Feb 2010 4:05 pm
The basis of umbrella schemes are 100 percent legal; problems arise when the claims for expenses are fictitious but this is the only way you can make it pay better than paye, other than that the only way forward is ltd NOT msc its where your an officer of the company where YOU control YOUR bank accounts and where YOU choose your accountant and then YOU take responsibilty for Your mistakes
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Alan Nolan | Fri, 12 Feb 2010 11:20 pm
It appears that there is an ever growing band of accreditation agencies which purport to provide comfort to the employment business that the umbrella is compliant. The fact of the matter is that HMRC will never promote one supplier over another preferring to support the concept of self regulation. Therefore, which one do you choose?
It is wrong that umbrellas have to fork out significant sums to the accreditation agencies who merely seduce the employment business into thinking that their product is best with false promises and boasting about being at the top table with HMRC policy makers.
What should happen is for all accreditation agencies to get together to thrash out a standard compliance model which all employment businesses could work to and then publish it - free!! That is if they really are seeking compliance instead of making a significant profit from what appears, on the face of it, to be scaremongering tactics.
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Chris Futcher | Thu, 25 Feb 2010 1:25 pm
The SPA is a robust and credible audit which covers many financial aspects of the Umbrella Company core business process. In terms of financial stability this is the best independent audit available. Personally I would have thought the best and most suitable way of a recruitment agency selecting an umbrella partner would be to undertake a proper supplier tender and perform due diligence which is proportionate to the importance of that relationship. Therefore if you actively make referrals to a managed PSL and take the decision away from the contractor, then the agency should be ensure that the partner they have referred is not trading with anything other than 1st class compliance, finance and operational processes in place.
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