FCSA calls for government clampdown on cloned umbrella companies
The Freelancer and Contractor Services Association (FCSA) has accused the authorities of failing to behave on data it has equipped concerning the issue of cloned umbrella companies, which it claims has price the Exchequer greater than £1m so far.
The Association is worried with selling tax and employment regulatory compliance within the prolonged momentary labour market provide chain, and likewise gives compliance accreditation to umbrella companies.
The FCSA issued a warning in September 2021 about the issue of umbrella firm clones, after it found no less than 10 of the umbrella companies that make up its membership had fallen sufferer to the follow.
The perpetrators’ goal is to extract fee from employment companies and end-clients by trying to cross themselves off as respected umbrella companies. They do that by registering a brand new firm with Companies House that has an analogous title to an present umbrella agency, successfully making a clone of that firm.
Individuals working for this clone will then contact employment companies and end-clients and attempt to cross themselves off as working for the corporate they’re imitating.
Typically, this contact will embody a notification that the umbrella firm being spoofed has modified its banking particulars, and all future invoices ought to be paid into a brand new checking account.
If the copycat firm is profitable in its makes an attempt to dupe an company or end-hirer on this means, this might end in sizeable quantities of cash being diverted elsewhere, leaving the umbrella being spoofed and the contractors on its books out of pocket.
In a press release, the FCSA mentioned it has “amassed substantial independent evidence” of this follow occurring, which it has handed on to the police, cyber crime reporting hub Action Fraud and a number of other government departments, together with HM Revenue & Customs.
“Unfortunately, the cloning activity continues and, to date, we have not been made aware of any action being taken by the authorities,” the assertion continued. “We believe that the fraudulent activities have so far deprived the Exchequer of well in excess of £1m through unremitted [National Insurance contributions] and income tax contributions.”
As a end result, the FCSA mentioned it’s persevering with to pursue the perpetrators through “civil means” whereas it waits for the authorities to take applicable motion.
“In the meantime, we urge employment businesses and contractors to ensure that the companies they are doing business with are the real thing by double-checking with Companies House or, for FCSA members, on the FCSA website,” the Association assertion continued.
“Employment businesses should take great care to ensure that any requests to change destination bank accounts from an umbrella or accountant are legitimate and pay careful attention to company registered numbers and names.”
Meanwhile, the Association’s CEO, Chris Bryce, referred to as on the authorities to behave on any studies of cloned companies they obtain.
“This form of corporate ID theft is all too easy, and the damage it does to all parties involved is substantial and lasting,” he mentioned. “I urge the authorities to take immediate action to bring this criminal activity to an end. I’d also urge government to give the Registrar of Companies the power to quickly and without delay strike off companies which are so obviously clones.”
