No gain for FCSA from us using only FCSA-umbrella companies, claims HMRC

HMRC has denied it gives the Freelancer & Contractor Services Association a commercial advantage by confining its engagement of umbrella companies to FCSA members.

Asked about the exclusivity issue, which is concerning MPs, HMRC explained its umbrella contractors all use FCSA-accredited employers due to a decision by its contractual partner.

An HMRC spokesperson told ContractorUK: “The choice to engage only umbrella companies that are FCSA-accredited is a choice made by our supplier.

“Therefore, HMRC is not endorsing the use of any particular association or body -- or their viewpoint, or breaking any rules.”

'Competitive advantage'

A former officer for the tax authority is unconvinced, saying it looks like, as the MPs say in a letter, “HMRC [is] stipulating that contractors must only use FCSA umbrella companies.”

“The fact remains there is a public document completed by serving MPs screaming a competitive advantage for the FCSA, regardless of where HMRC is in the chain,” the ex-officer said.

James Poyser, a chartered accountant is more accepting of the Revenue’s position.

'HMRC doesn't have robust independent assurance processes'

“It's clear it's not HMRC mandating FCSA, but a recruiter [or consultancy] somewhere in the chain,” said Mr Poyser, who is CEO at inniAccounts.

Also the CEO of, Mr Poyser continued in a statement to ContractorUK: “[But this] does go to show the problem we're all facing with supply chain compliance.

“Even HMRC doesn't have robust independent processes in place for assurance, and instead is relying on others in the supply chain to do this. It's a case in point that umbrella companies need regulating.”


Phil Pluck, chief executive of the FCSA, was earlier this month asked by MPs  to “assist” the Loan Charge and Taxpayer Fairness APPG in ascertaining how HMRC contractors ended up on “schemes,” given HMRC uses only FCSA umbrellas  (as HMRC says), and given FCSA umbrellas do not “operate or recommend” schemes (as Mr Pluck has said).

The group’s Sammy Wilson MP of the DUP with his fellow co-chairs Tory MP Greg Smith and Labour MP Mohammad Yassin MP said at the time: “We are also taking this issue up with HMRC, to see if they can reveal how this situation arose, when they clearly state that they insist on contractors who use umbrella companies using FCSA accredited umbrella companies and claim that this is properly checked, when contractors are engaged by HMRC.”

The three MPs added to Mr Pluck: “This should have avoided the embarrassing situation HMRC found themselves in, with contractors working for them using DR schemes, but it did not – so this does need looking into.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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