AUCAE have recently been engaging with a number of recruitment agencies who are concerned about ‘incentives’ that are being paid, by umbrella companies, directly to consultants without the knowledge or approval of the recruiters’ Directors. Such practices leave both the recruiter and the consultants at risk (under the Bribery Act and Income Tax legislation) so it comes as no surprise that many recruiters are concerned about dealing with umbrella companies that use such underhand techniques to try and gain business.
The Association of Professional Staffing Companies (APSCo) has strict guidelines surrounding ‘incentives’ or ‘referral fees’ that are offered to its members by affiliate members (umbrella companies). AUCAE members feel that recruitment agencies should have confidence in the umbrella companies that they work with and certainty that their business relationship will be one based on transparency and trust. Therefore, their comprehensive Straight Talking Umbrella Company Charter has been amended to reflect the current best practice demanded by industry leaders.
From now on all member companies will work to the following:
No member will offer rewards or incentives to individual recruitment consultants without the express written permission of a Director of the recruitment business.
No member will offer rewards or incentives to recruitment consultants unless they fulfil the criteria to qualify under an approved HMRC scheme to cover such rewards and should therefore not take the form of cash.
No member will offer rewards or incentives to recruitment consultants unless they are made under an approved HMRC “Taxed Award” scheme, with all relevant taxes and NI fully accounted for to HMRC.
No member will enter into a commercial arrangement with a recruitment business, which they know will threaten the financial stability of their organisation.
Therefore, proposed timesheet rebates (or similar continuing arrangements) should be evaluated in terms of percentage of profit and not gross turnover and must be proportionate to the value of the service provided. Any agreements for timesheet rebates (or similar commercial arrangements) must be entered into under a contract, to be signed by all parties, in which all terms are transparent.