The Compliance Barometer: Recruitment leaders have their say Introduction Steve Wortley, Outsauce Survey results Andrew Webster, Outsauce.

The Compliance Barometer:Recruitment leaders have their say

Introduction

Steve Wortley, Outsauce

Survey results

Andrew Webster, Outsauce

Lifting the lid…

An anonymous survey to uncover:

• Attitudes• Impact• Approach

Spoiler: HMRC and unscrupulous recruiters do not get off lightly…

Recruiters - uncertain, but not unwillingSnapshot:

Our key discoveries:

• Agencies are keen to ensure compliance• but are unclear of their obligations…• …and how to achieve them• Doubts too over enforcement

‘Help us to help you HRMC’

Recurrent theme:

Inside The Compliance Barometer

Respondents by number of staff

Respondents by sector

Our survey said…

Supply chain compliance

• Do you currently take steps to assess and manage compliance risk through the recruitment supply chain?

Supply chain compliance

• Do you currently take steps to assess and manage compliance risk through the recruitment supply chain?

Varying levels of thoroughness

Our contract reviews are checked by our solicitors and advisers

We review contractual terms, implement credit checks of relevant entities, carry out full checks of workers (right to work), references,

security checks etc.

We are contracted to the NHS, therefore our compliance assessments are extremely thorough in every area of our

business

Top down pressure

Requests for:

• Candidate information• Audits• Evidence• Indemnities

All part of the service?

Should compliance through the supply chain be the agency’s responsibility?

…Or a wish to share the load?

(Behind closed doors it’s clear that recruiters want end clients to play their part…)

Due diligence

Who should undertake compliance checks of service providers?

• 2 to 1 say agencies should conduct

their own due diligence, not external consultancies

• Two steps forward… no SLAs?

Contractor compliance

Business Entity Test

Is it effective?

20%

What about IR35?

A widespread lack of understanding…

IR35 is complex, but recruiters are expected to make a decision on it and we are not qualified to do so.

Expenses…

Expenses – a black hole

Is non-compliant expense claiming widespread?

2 to 1 say yes

A message for HMRC

Only 18% think HMRC is doing enough at

present to clamp down on non-compliant claims…

Communication a key issue

2%

So how should non-compliant expense claiming be tackled?

Respondents were very forthcoming with their suggestions…

A message for HMRC

HMRC should give very clear advice in plain English

HMRC puts the burden of interpretation on agencies, but reserves ultimate judgement – and hands out fines if you

have interpreted the information incorrectly

The only way to tackle the problem is to have more accountant auditors, working on behalf of HMRC

reviewing companies’ expenses

A message for HMRC

Nobody should be allowed to claim expenses without a receipt (especially umbrella employees). The practice is

giving agencies and umbrella companies a bad name and will lead to this method of working being made illegal.

Fines. Big ones. Published.

Name and shame…

Name and shame…

Pensions auto-enrolment

Our survey said…

• Doubts over clarity• A lack of preparation• No desire to bear the cost…

‘Opt-out’ of AE?

Some short sightedness over the weight of the legislation…

AWR

In your opinion, has AWR been an effective piece of legislation or

bureaucratic burden?

A conclusive consensus

63% say a bureaucratic burden

4% consider it effective

22% suggest it’s both…

Comparable pay

The end client response

AWR in the test case era

Just 8%planning changes…

The bigger picture:

Is recruitment industry legislation generally effective in removing

unscrupulous practices?

Will HMRC’s renewed powers help?

• 55% are keeping the faith (but 37% aren’t holding their breath…)

It’s clearly unclear…

Are there any areas of legislation from the last government that are clear? No – too much ambiguity. When ministers say we'll

let the courts sort it out you can tell they are not interested

IR35. We need a simple process for recruiters to identify compliance, yes or no. We are

not accountants!

EAR2003 is overly complex

…it still seems to be written in lawyers’ speak

Legislation: Why bother?

A double whammy?

It creates more (of a) burden for reputable compliant agencies while the unscrupulous ones remain

Some agencies spend a lot of time, effort and money to make sure they comply whereas others do not comply with everything

and get away with it as no specific checks are made

Unscrupulous agencies will continue to avoid or play the system – while law abiding agencies will be punished if they

are only a fraction non-compliant

…Or a necessary burden?

There is a certain ambivalence and arrogance that regards legislation as an irritant rather than a

way of improving things for contractors

Government acknowledgement is vital

The government should embrace and recognise how recruitment agencies are valuable to the growth of the UK's

workforce and stop giving them so much red tape

Why isn't the government using the recruitment industry to help people get back into work instead of going at it half-cocked

themselves? After all - we're the experts!

Summary

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