Umbrella Company IPS issued with an SRN by HMRC

Does anyone know what checks Professional Passport and APSCo does to prevent tax avoidance umbrellas from being accredited by them?

I ask as IPS Umbrella, currently accredited by Professional Passport and APSCo, is owned, and operated by the same people that own and operate IPS Progression Ltd, which has been issued with a DOTAS SRN, number 92818535. For those that are not aware, HMRC issues an SRN when it believes an umbrella is promoting a tax avoidance scheme.

Provided to us by a contractor is the formal AAG6 notification sent by IPS Progression Ltd to them confirming the SRN number. To our knowledge, IPS have not provided any explanation to their thousands of employees past and present.

But the point here is, irrespective of the nature of the audits undertaken to allow an organisation to become part of these organisations, and the enormous commercial advantage and access to contractors that this provides, did anyone in these organisations think to have a cursory Google? After circa 30 minutes of research, I found that “IPS” is part of a fairly long string of connected umbrella and temporary work services companies originating from the Isle of Man (recognised as the epicentre of tax avoidance schemes) going back to 2004, owned and operated by the same people in what was described in an Isle of Man VAT Tribunal judgement on 18/08/2020 as an “informal group structure”; entering ‘IPS VAT’ into a search engine will bring you these results.

The research quickly revealed that IPS was accredited by the FCSA a couple of years ago, and announced in a Global Recruiter article, but was discreetly removed. This means that the FCSA, Professional Passport and APSCo all passed IPS on their accreditation when HMRC believe are running a tax avoidance scheme.

It is understood that the IPS business model is to achieve agency PSL status for IPS Umbrella and use that to attract non-the-wiser contractors but then pass contractors over to IPS Progression to sign up to a tax avoidance scheme, probably unbeknown to the agency and the contractors.

So, if a quick internet search can make the obvious connections to tax avoidance schemes linked to the Isle of Man, how was it missed by the FCSA, Professional Passport and APSCo? Also, surely they must know that an SRN has been issued, so why are they still accredited? Or will they quietly disappear from Professional Passport member listing? Will agencies and contractors be unaware they’ve been unaccredited and therefore continuing to use them?

Can the FCSA, Professional Passport and APSCo shed any light on how these umbrellas pass and retain accreditation? Or how we should have confidence in the accreditation audits? The legitimate umbrellas must be getting frustrated with the constant news and must vocalise the requirement to get these members removed?

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