Use of labour providers: advice on due diligence

23 May 2017

If you use labour supplied by a third party then HMRC’s updated guidance will help you understand how to safeguard your business from financial and reputational risk whilst maintaining the flexible workforce you need.

HMRC continues to find non-compliance, illegal working practices and fraud in labour supply chains across business sectors and is committed to tackling these issues in order to fund essential UK services, stop modern slavery, and create a level playing field for all those businesses complying.

Businesses should protect themselves by undertaking checks to understand:

  • where their workers are coming from
  • how they are being paid
  • the legitimacy of those arrangements.

Businesses need to undertake checks within 4 key areas to ensure:

  • their supplier of labour is legitimate and has no history of non-compliance
  • they understand and approve the labour supply chain
  • agency workers are paid their contractual rate and it complies with the National Living Wage (NLW)/National Minimum Wage (NMW)
  • they are doing all they can to eradicate modern slavery and illegal working in their supply chains.

For full details read the updated guidance: HMRC’s use of labour providers: advice on due diligence.