Protect yourself from fraudulent umbrella companies

The dangers of using fraudulent umbrella companies are significant, with serious financial and legal consequences for workers and providers alike. At least 275,000 flexible workers used umbrella companies that failed to comply with tax obligations from 2022 to 2023. According to His Majesty’s Revenue and Customs (HMRC), many more continue to be affected by fraudulent umbrella company activity.

In December 2024, at the request of HMRC, the High Court issued an interim order against Ducas Limited and associated companies (commonly known as Maxipay) over alleged non-payment of around £171 million in employer National Insurance Contributions (NICs). The allegations raise serious concerns and serve as a valuable reminder about the risks of using umbrella companies engaged in tax avoidance schemes.

Safeguarding healthcare staff and providers

As a leading global healthcare delivery partner, Acacium Group prides itself on maintaining high standards of compliance and ethical conduct.

We conduct rigorous checks to ensure that the umbrella companies on our approved supplier list meet all legal requirements. Our payroll team carries out regular audits, identifying and addressing any issues to protect both Acacium Group and our workers.

We only work with companies that hold and maintain recognised accreditation, such as Professional Passport or Freelance and Contractor Service Association (FCSA) accreditation. We also use SafeRec, which conducts real-time payroll auditing to ensure accurate and compliant payroll processing. Any company that fails to meet our compliance standards is promptly removed from our approved supplier list.

If an umbrella company is removed, we notify workers so they can make an informed decision. However, those who choose to remain with a non-compliant provider will no longer be able to work with Acacium Group.

Risks to healthcare workers from fraudulent umbrella companies

Unfortunately, over the last 12 months, our staffing businesses have seen a growing number of umbrella companies lose or fail to renew their Professional Passport or FCSA accreditation. While the appeal of higher pay may seem tempting, these schemes bend the tax system’s rules and can expose healthcare professionals to serious financial risks. If HMRC determines that a worker has used a tax avoidance scheme, they could be personally liable for:

• The tax and National Insurance contributions legally due
• Interest on any unpaid tax
• Additional penalties imposed by HMRC

These costs come on top of any fees already paid to those promoting the scheme, leaving workers facing significant financial losses. HMRC can also backdate tax claims, resulting in unexpected and potentially crippling debt for hardworking professionals.

To avoid falling victim to fraudulent umbrella companies, healthcare professionals should:

• Request detailed payslips (ideally matched to HMRC real-time information submissions) that clearly outline tax and National Insurance contributions and ensure they match the money received in their bank account.
• Be cautious of schemes promising unusually high take-home pay, as these often rely on tax avoidance arrangements.
• If in doubt, seek advice from a trusted recruitment agency or legal professional.
• Only work with staffing agencies that conduct thorough compliance checks on the umbrella companies they engage with.

To learn more about how tax evasion schemes can impact healthcare professionals, read this article by Pulse, part of Acacium Group.

Risks to healthcare providers from fraudulent umbrella companies

Healthcare providers should seek to work with staffing agencies that uphold the highest standards of regulatory compliance. Using agencies that supply workers linked to non-accredited umbrella companies can expose healthcare workers to unnecessary risks.

Under the Criminal Finances Act, failure to prevent tax evasion in the supply chain can lead to liability, even if the provider was unaware of any wrongdoing. If tax evasion occurs, healthcare providers could face legal consequences. Therefore, it’s essential not to ignore unscrupulous umbrella companies. Engaging with compliant partners who properly vet their supply chain is not only good practice but also vital to avoid potential legal and financial repercussions.

At Acacium Group, we align with our core value of putting people first by refusing to work with non-compliant umbrella companies. We conduct regular spot checks and update our approved supplier lists to safeguard the interests of both workers and providers.

To protect healthcare workers from fraudulent umbrella companies, healthcare providers should:

• Partner with staffing agencies that only work with accredited umbrella companies compliant with HMRC guidelines.
• Ensure that agencies on their approved supplier list regularly check the background of umbrella companies, as their accreditation status can change.
• Conduct regular audits of payroll and financial processes to identify any irregularities early.
• Educate HR and finance teams on the risks of fraudulent umbrella companies and the importance of compliance.

Why Partner with Acacium Group?

• Compliance and transparency: We carry out robust due diligence checks and regular audits against the umbrella companies on our approved supplier list.
• Trust and accountability: With a proven track record of reliability, we address and resolve discrepancies promptly.
• Enhanced reputation: As a member of the REC, Acacium Group adheres to a Code of Professional Practice, demonstrating our commitment to high industry standards.
• Access to talent: Our extensive network provides access to a larger and more diverse pool of healthcare professionals, ensuring you can find the right staff and workforce solutions to meet your specific needs.
• Ongoing support and peace of mind: We provide ongoing support and training to workers, ensuring they stay current with the latest healthcare practices and standards. This commitment gives you peace of mind, allowing you to focus on delivering exceptional patient care.

Safeguard your organisation today

Protect your career and organisation today by partnering with a compliance-focused staffing provider. Contact us to learn more about safeguarding your operations against rogue umbrella companies.