Bribery Act 2010

Umbrella Company ‘Referrals’ A Thing of the Past

In our opinion; providing a first class service to recruitment agencies will build lasting relationships, which is a key element in helping us to increase customer base. Our dedication to providing a fast and efficient service means that we save recruiters time and therefore money; as a result recruiters will often suggest that their contractors become employees of ContractorUmbrella.

An alternative to the above is for Umbrella Companies to offer financial incentives to recruitment agencies or individual consultants in exchange for recommending their services.

Under the new Bribery Act 2010, giving or receiving financial incentives to gain a commercial advantage is considered a bribe. From April 2011 the maximum penalty for bribery will increase from 7 to 10 years imprisonment.

The Bribery Act still applies if an arrangement exists between an Umbrella Company and individual consultant without the company’s knowledge. This creates new problems for agencies as the penalties for failing to prevent bribery are unlimited and you also face a ban from tendering for Government contract. This puts a strict onus on the recruitment firms to ensure that this type of relationship doesn’t exist. Failure to do so could see them caught up in costly legal battles with damage to the company’s reputation.

There is also another issue whereby HMR&C would consider the money as taxable and failure to declare the additional income could be treated as tax avoidance.

Here at ContractorUmbrella we monitor where people heard about us and the most common response is a recommendation by either the agency or a friend/colleague. We believe this speak volumes about the quality of service we offer our contractors and have never relied on paying financial incentives to gain new business. Let us help you.

If an Umbrella Company approaches you and offers you a financial incentive in exchange for leads; no matter how they dress it up, it is likely to fall foul of the new bribery act and therefore you should ask yourself the question – is it worth it?

If you would like to discuss any details on this page you can contact one of our expert advisors on 01206 713 680 or email us at agency@contractorumbrella.com.