Following our recent invitation to FCSA members to review the proposed changes to the Codes of Compliance, we have received some queries to request clarification on some aspects of the revisions.
Therefore, please find below responses to the most common queries received from members:
Proposed – Mandatory A4
For the purpose of detailed assessment and the ability to confidently sample evidence, the minimum number of active contractors is set at 75. It is not unusual for a new applicant to present just 5 to 10 contractors, but they are rejected based on our inability to properly evidence compliant practice.
Existing members looking to move into a new assessment area must be at a stage where they are confident of achieving this minimum number soon and those members whose numbers are likely to fall below this number may have perfectly legitimate reasons for doing so and so it would be a matter of discretion of the CEO whether the FCSA can continue to assess this area which would also consider the financial cost of such an assessment.
Proposed – Mandatory A12
Does the Applicant / Member company or any associated company linked via Directors (who have been required to complete FCSA Fit & Proper Person forms) operate a joint employment model? If so, please provide a detailed explanation of the company and model to FCSA. FCSA do not support the operation of joint employment models and reserves the right to ask any member to cease the operation of these models within a reasonable time.
We have had a few queries that are asking for the reasoning behind this proposal and a couple that would like a definition to be added.
We will discuss this area at the FCSA Board meeting and will of course (like all other points) provide a full response whilst also considering whether these changes need to be reviewed in the light of the comments.
Proposed – Mandatory A19 & A20
This new addition to the Mandatory section has been added to capture any element where payments are potentially outsourced. Where a company is outsourcing their payroll, it creates another intermediary level but one that FCSA haven’t assessed as compliant. There is no suggestion that this arrangement will be banned within the FCSA Codes, but we do feel that it is essential for transparency and if necessary that FCSA can be assured (on behalf of the supply chain and contractors) that risk is mitigated within these arrangements.
Proposed – CIS/Self-Employed A7
The change here is requesting that you satisfy yourself, before making any payment, that they truly should be a self-employed worker. The previous codes stated before the ‘second’ payment. Many times, the worker has not yet been on-site when they sign up, so they can’t accurately answer the SDC questions, however, in contrast, some sign up when they have already started so would be able to answer your questions at onboarding.
Proposed – Limited Company Advisor – Declaration
Where the FCSA Codes ask for a list of companies being assessed by the codes, this refers to the legal entities that are seeking accreditation. The declaration is an addition to each code area.
Agencies reach out daily to ask if different subsidiaries of our Members have been accredited, this small addition will provide transparency by ensuring only the legal entity applying for accreditation receive it. The FCSA certificate and website will also reflect the company names that went through the assessment process.
We are also finalising a decision on whether FCSA members receive separate logos for only those areas that are assessed and accredited.
Proposed – Umbrella Employment – A3d
Clearly states deductions including but not limited to: Employer’s NI, Apprenticeship Levy, Employee’s NI, Income Tax (If there is reference to Company deductions or Employment costs, the illustration must clearly state what these are);
This area has received universal support with some FCSA members suggesting that we go further in terms of transparency. These suggestions include:
- Employer costs line being further separated out.
- Further additions that reflect the removal of the personal tax allowance above £100k
Of course, we will consider these and other suggestions that create more clarity.
Proposed – Umbrella Employment – A6
Confirm your marketing literature, web pages, scripts and training material all support the employment model and make no references to the employee being a client, to fixed expenses being acceptable, to them being able to earn ‘free weeks’, ‘margin free weeks or reduced charges to them. Where you offer different models which require a different margin, these are properly explained to potential employees and do not make reference of different levels of service or charges for products unless those charges are deducted from net pay and VAT accounted for as required (Note: Variable margins are allowable where this is properly explained to the individual, the individual is clear as to what is included with the higher margin and that they have a choice as to which offering and the associated margin they wish to go with)
The comments received for this point are surrounding the wording, again, these are valid points and ones that the FCSA Board and the CEO will consider when finalising the revised FCSA Codes.
Proposed – Umbrella Employment – Removal of Fixed Expenses
A small number of Members have raised concerns regarding the removal of the fixed expenses umbrella model and the time frame in which this would be expected. As such, this will be raised again at the Board for further deliberation.