A new report published in the Mirror alleges that there is a “flood of clone firms” operating in the UK’s self-employed sector. These firms are reported to have names that are “virtually identical” to the umbrella companies that a large number of freelance workers in many industries operate and are paid through.
The report quotes several figures from genuine umbrella companies who claim that newly incorporated firms have appeared with names and details that are incredibly similar to their own. This includes the genuine umbrella firm iConsult Payment Solutions Limited, with a new company appearing with the similar name iConsult Payment Solutions Umbrella Limited.
Steven English, a director at iConsult Payment Solutions Limited, told the Mirror: “The clone has taken our name, added one word and incorporated a company. They’ve got hold of our VAT certificate, our business insurance certificate, our PAYE reference number, a Bristol telephone number and are using all these details to pose as us.”
“I know they are using these details because contractors have sent them to me. The only difference is the bank account details.”
Many of the umbrella company figures quoted in the report claim that, when they alerted Companies House to the situation, their appeals were refused, with Companies House claiming that the names of the “clone companies” were sufficiently distinct.
Mr. English said: “We’ve spoken to Companies House and their reaction is that the name is different enough to be acceptable. They are not interested even after they’ve been told that there are 15 clones all apparently set up by the same people.”
“Workers are putting themselves in an awful position if they think their taxes are being paid and they are not, and if there’s an accident there’s no insurance in place to cover them, because my insurance wouldn’t because they are not employed by me.”
Chris Bryce, CEO of umbrella company trade body the Freelancer & Contractor Services Association (FCSA), was also quoted in the Mirror, saying that: “The real issue is the ease with which this cloning is done.”
Bryce continued: “Because the registrar of companies seems to be unwilling or unable to police the names of new companies and compare them to existing ones it is relatively easy to set up a clone – and the registrar is so slow to strike these off.”
“The root cause is the criminal but the system itself does not make it difficult for clones. It’s baffling how this situation has come to pass.”
Responding to the report, a Companies House spokesperson said that it does not currently have the power to investigate suspected instances of fraud. However, the spokesperson added that planned new reforms will include identity verification for those operating business, while Companies House is set to be empowered to challenge information that it is provided.
Author: Steven English