We ask ex-FCSA chief executive, Julia Kermode, about her appointment as the new CEO of umbrella company compliance specialist, PayePass, and how she aims to stamp out non-compliance in the umbrella industry supply chain.
Her appointment comes as the proliferation of non-compliant tax avoidance schemes continues to pose a risk to over 500,000 flexible workers, along with recruitment agencies and end-clients.
FI: What role does PayePass play that the FCSA does not?
JK: The FCSA seems to have a very light touch in relation to analysing what its members do to calculate and pay umbrella contractors.
By comparison, our approach is much more detailed. PayePass undertakes a full financial audit that starts when an umbrella receives payment of the assignment rate, then through the financial processes to the financial calculations and then, by ensuring that all correct payments are actually made.
It does this first with its bespoke auditing software then, with a USP – full eyes-on auditing by accountants and payroll experts that investigate and question the full flow of funds, leaving no stone unturned. There really is nowhere to hide.
If agencies and end-clients do not have proper due diligence in place, they will be fair game for HMRC which could financially ruin many businesses.
Now that you are becoming CEO of PayePass what is the first thing you would like to tackle and why?
JK: Ensuring that more of the entire supply chain fully understands the benefits of PayePass financial auditing and the risks of dealing with the umbrellas that are exposing it to financial and commercial risks.
This will be just the start of my journey at the helm. PayePass’ in-house legal, accountancy and payroll expertise have so much more to offer to aid compliance in the sector and I plan to ensure that the full range of expertise is made available.
What will become of IWORK?
JK: IWORK will continue as it’s so important for temporary workers to continue to have access to the information I make available. There is a huge synergy with PayePass, as both seek to benefit and protect temporary workers. Both brands are definitely complementary to each other.
Contractors will know the umbrella that employs and pays them is doing it correctly, which means no unlawful salary deductions of any description.
What incentive does the contractor supply chain have in using your software if the rumours of withholding holiday pay; skimming and backhanded fees to recruitment agencies that promote certain umbrella companies?
JK: The incentives are huge. PayePass is unique in being able to 100% guarantee that no tax avoidance schemes are taking place – in other words, you get true peace of mind by choosing a PayePass verified umbrella.
Contractors will know the umbrella that employs and pays them is doing it correctly, which means no unlawful salary deductions of any description. For agencies and end-clients – and with HMRC sharpening its teeth to remove tax avoidance from the supply chain – it will soon start to look at recovery of what the Treasury has lost out on.
Proposed changes to the Criminal Finance Act are just the start of HMRC putting in place the route for recovery from those key parts of the supply chain. If agencies and end-clients do not have proper due diligence in place, they will be fair game for HMRC which could financially ruin many businesses.