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FCSA urges agencies under attack for tax avoidance to check their due diligence

A media report in The Guardian (November 15th) suggesting that temporary agencies are operating tax avoidance schemes costing taxpayers millions of pounds has prompted The Freelancer & Contractor Services Association, the UK’s largest independent trade association that is committed to setting standards for contractor accountancy providers and umbrella employers, to urge all agencies to seek legal advice before embarking on any unusual arrangement with partners in the supply chain.

FCSA would like to point out that when the employment allowance was introduced, anti-avoidance legislation was also issued aimed at targeting firms that seek to engineer ways to exploit the allowance.

Julia Kermode, chief executive of FCSA said: “Compliance should be at the heart of all agencies and the partners they work with and I would urge all agencies to practice due diligence at all times and know who they are working with. It is worth noting that HMRC’s firm view is that such schemes are notifiable under the disclosure of tax avoidance schemes (DOTAS) rules and anyone who has not informed HMRC could be liable for a fine of up to £1m.  FCSA is committed to setting standards and stamping out unethical practice and I would advise all supply chain partners to seek independent specialist advice about any arrangements that don’t smell right if you want to avoid getting caught out.”