National press covers umbrella companies falling victim to Companies House cloning

The cloning of umbrella companies has made it to the Daily Mirror, seven months after the attempted fraud was first revealed to ContractorUK.

But since then (September 2021), the clones have spread to genuine umbrella comparison websites and, the Mirror now reports, such sites aren’t alone in failing to take steps against the clones.

“Any chance that Companies House will sit up and listen? Probably not,” says Clarity Umbrella, which was reportedly cloned but didn’t get much help from the BEIS-run agency.

'Blatant fraud attempt'

In fact, when Clarity’s Lucy Smith phoned Companies House to report imposter ‘Clarity PAYE’ using its good reputation to hoodwink contractors into using an avoidance scheme, officials seemed less than proactive.

“When there is a blatant fraud attempt happening why is it that Companies House will still not do a thing to take these businesses down?” asks Ms Smith’s, Clarity Umbrella’s director.

Even told that clone ‘Clarity PAYE’ representative ‘Rajesh’ was hijacking her own name too on his calls to unsuspecting contractors who were promised “fantastic” take-home pay, Companies House apparently remained unmoved.

'Leaving contractors at risk'

Speaking to ContractorUK, Ms Smith said that due to its inaction, it seems the UK register of companies is “helping to empty the government coffers, while leaving contractors at risk.”

Online yesterday, a contractor supplying The Professional Records Standards Body, reflected on Clarity being cloned:

“There seems to be a deplorable pattern of failure on the part of responsible bodies such as Companies House to exercise robust - or any - scrutiny as part of their regulatory responsibilities,” the PRSB contractor posted. “Unless they are absolutely forced to”.

'Some £400 later for me, while the clone gets a month to name-change'

Unfortunately Clarity Umbrella is far from the only victim of cloning.

Another bonafide umbrella company CWC Accounting Solutions is featured in the Mirror story as having its business cloned too. Again for the purposes of fraud.

CWC’s director Carolyn Walsh told ContractorUK: “The issue is still rumbling on, as my own company’s appeal to Companies House [against the clone ‘CWC Accounting Solutions Enterprise Limited’] has been allowed.

“But the appeal saw Companies House charge me £400 because they first refused to act on the basis that the clone was not similarly-worded enough! Now, finally, the offender has one month to change the company name away from anything similar.”

'Need to raise awareness of these fraudsters'

Companies House reportedly says that under incoming reforms, its officials will be granted the power to challenge the information it receives, and filers will need to verify their ID.

“We need to raise awareness of these fraudsters [now],” says Clarity Umbrella’s Ms Smith, sounding understandably unprepared to just sit and wait for the reforms.

“Contractors -- do not be fooled. Not only does the cloned umbrella offer you an avoidance scheme, but they are also trying to do this off the back of legitimate businesses. We know that the take-home via an umbrella is not always that appealing, but at least we are honest about it!”

'Watch out'

Until the Companies House reforms are introduced, CWC’s Ms Walsh worries her legitimate business could be cloned again.

“I imagine other [clones] will be coming through now. This attempted fraud [to set up a company to impersonate another company to target the genuine company’s business, clientele or agency partners] is something that can easily be repeated at any time in the future,” she warned. “So watch out genuine brollies and their users.”

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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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