With all the recent events with mini umbrellas, let us remind you of the importance of implementing due diligence checks to assure your labour supply chains.
Failing to do so may result in significant legal, financial and reputational risks for your business. In the end, you may be liable for any unpaid tax or NI contributions and also be unable to recover any input VAT incurred in an irregular supply chain.
Here’s a few examples of what you can do to minimize risks in your supply chain:
- Add a clause to your contract requiring your authorisation before further sub-contracting to a third party.
- If you’re outsourcing your workforce, make sure that the supply chain is not unnecessarily long or that the workers weren’t repositioned into ‘mini umbrella companies’.
- Tell HMRC about your payroll or staffing outsourcing arrangements.
- Check if the workers are actually paid their contractual rates and whether they comply with the NMW and NLW regulations.
More details can be found on the HMRC webpage.