Reply to: FPS (freelance professional services (umbrella company)

[northernladuk]

I am all ears...

Your FB picture agrees it seems...

[lucyclarityumbrella]

And I hope as a professional you have pointed out the issue along with the evidence to Lucy or someone else there. If not may I suggest you are not as honourable as you are pretending to be....

I am all ears...

[Matt FPSGroup]

PS HSBC are regulated in U.K. As well as Hong Kong.

HSBC do their administration and have their call centre in India. My point was merely that administration could be done outside of the UK, but still adhere to the relevant laws of the country. The same applies with us.

I guess we’ll just have to agree to disagree on our regulation. I just hope that the umbrella companies you use do not go into administration with your funds in their bank. Perhaps you will adjust your views on the relevance of safeguarding funds at that point.

[Andy Hallett]

PS HSBC are regulated in U.K. As well as Hong Kong.

[Andy Hallett]

I'll answer for you, "it's not"

[Andy Hallett]

In one sentence: How is IOM regulation relevant to a UK umbrella?

[Matt FPSGroup]

You said you were regulated. Given that UK umbrellas are unregulated, I was interested why you claim to be regulated. As suspected, you are regulated by an irrelevant body for the purposes of this discussion.

At no point have I said the Offshore Rules apply to your U.K. Umbrella company.

Our regulation absolutely is relevant. If you can choose a compliant umbrella company that adheres to all relevant regulations, with administrators who are held to a much greater account than any other umbrella provider, why wouldn’t you opt for that?

The financial positions of a lot of our competitors is horrifying, when you look at the consolidated position rather than just the umbrella company itself. It’s only a matter of time before an umbrella of a significant size goes pop, which will cause huge repercussions in the market. As I keep on saying, that is simply impossible with us, because of our regulation.

Surely you feel that safeguarding your agency/contractor funds throughout the supply chain is important?

[Andy Hallett]

You said you were regulated. Given that UK umbrellas are unregulated, I was interested why you claim to be regulated. As suspected, you are regulated by an irrelevant body for the purposes of this discussion.

At no point have I said the Offshore Rules apply to your U.K. Umbrella company.

[Matt FPSGroup]

I stopped reading after this. Completely irrelevant.

We were audited by EY last year. They have confirmed that the offshore intermediaries legislation doesn’t apply, as we are administering UK umbrella companies. Given that you weren’t able to read my entire post, perhaps a quick reiteration of the last paragraph might be appropriate:

Given that you only believe companies that do their administration in the UK can be compliant, do you believe that HSBC don’t adhere to UK banking regulations because their call centre is based in India? In fact, there are large recruiters that do their admin outside the UK too. Perhaps contractors on their PAYE are also at risk?

[Andy Hallett]

We are a corporate service provider, regulated by the Isle of Man Financial Services Authority.

I stopped reading after this. Completely irrelevant.

[Matt FPSGroup]

QC approved?

There’s no need to get QC opinion for UK umbrella companies. As we don’t offer any kind of offshore tax structuring, loans or other exotic avoidance structures, we save a shedload on legal fees. Phone up for an illustration if you want – the take home is evidence enough that the umbrella companies we administer aren’t doing anything shonky 😊

[Matt FPSGroup]

And I hope as a professional you have pointed out the issue along with the evidence to Lucy or someone else there. If not may I suggest you are not as honourable as you are pretending to be....

Unfortunately, I don’t know who Lucy is and have no evidence to present to her. My information is second/third hand from agencies/contractors and a decent knowledge of my competitors. If Lucy wants to contact me, I am happy to discuss what I have heard.

[Matt FPSGroup]

By who?

We are a corporate service provider, regulated by the Isle of Man Financial Services Authority. In order to become a regulated entity, we have to do the following:

• All Directors, key members of staff and associated individuals are checked to ensure that they are fit and proper to undertake regulatory activity (qualifications; police checks; experience)
• Client funds ring fenced, separate to our main trading account
• Client Account must be reconciled and hold a letter from the Bank confirming it is for the benefit of the client and not the funds of FPS.
• Compliance Officer and Money Laundering Reporting Officer must be appointed
• We must demonstrate our compliance through:
o Adherence to anti-money laundering legislation
o Organising and controlling internal affairs in a responsible manner
o Promoting high ethical standards
o Putting appropriate internal controls, policies and procedures in place
o Applying independent audit and internal compliance procedures

This is different to all other umbrella providers, as the industry is entirely unregulated. Most umbrella companies will take your money in to their own beneficial ownership, their processes and procedures don’t have to be audited and their directors can be appointed without relevant police checks or verification of their suitability to run a payroll company. This has led to a number of cases where umbrella providers have gone in to administration and contractors have gone unpaid – agency/contractor funds have been utilised to repay debts. The directors of those same umbrella companies have then started new operations under different names with no recourse for their previous agency partners or employees. With ourselves, this is simply not possible.

We don’t make a secret of our location. Feel free to download our corporate brochure – it says it on the first page. It is also all over our website. The reason we do this is because we like to be transparent.

As I said before, every umbrella company we administer is a UK company with UK banking arrangements. Agencies/end clients contract with a UK company; contractors are employed by a UK umbrella company. There is no offshore entity within that supply chain. Our Isle of Man company invoices the UK umbrella company for our administration fee once all payments have been made.

Given that you only believe companies that do their administration in the UK can be compliant, do you believe that HSBC don’t adhere to UK banking regulations because their call centre is based in India? In fact, there are large recruiters that do their admin outside the UK too. Perhaps contractors on their PAYE are also at risk?

[Andy Hallett]

Not going to happen. I appreciate your input here, but I have a very tough job to just get companies in your group to stop spamming me with totally inappropriate jobs. If I were actually to take a role through an S3 company I can't imagine the hounding that would result in. Academic anyway, I no longer do UK work. So if I buy a Douglas flat and open a IoM company it won't be doing any UK work any time soon anyway.

The way we market roles to candidates is changing / will further change. We are moving towards true user preferencing. Two reasons for this, GDPR and Customer Feedback.

[Fred Bloggs]

We'd love to work with you if you used a UK company though! I appreciate it was a rather short answer last night.

The issue with trading with an IOM company is the offshore intermediaries legislation.

Potentially if your assignment was onsite on the IOM we'd review it.

Not going to happen. I appreciate your input here, but I have a very tough job to just get companies in your group to stop spamming me with totally inappropriate jobs. If I were actually to take a role through an S3 company I can't imagine the hounding that would result in. Academic anyway, I no longer do UK work. So if I buy a Douglas flat and open a IoM company it won't be doing any UK work any time soon anyway.