Set out the contractual relationships clearly, review each contract at each stage of the process, upper and lower levelMyth Buster; “I have QC opinion so I’m compliant and my business is operating legally”.
NO! Not necessarily, QC opinion may not be worth the paper it is written on, QC opinion does not mean you are compliant or operating legally.
Recruiters are constantly trying to achieve compliancy for themselves and in turn their clients, with demands often being made for QC opinion on their payroll processes and compliancy. The myth is that once this “QC opinion” has been obtained everyone is safe and secure in thinking that everything is ok from a compliancy and legal perspective, this is not always the case.
Why not? Because when you get QC opinion on any subject you choose, you have to be specific, about what you are actually trying to clarify, what you are actually doing, not what you think you are doing, or want to do. For instance you could ask your QC, ‘shall I have a black car or a white car? The QC says ‘a white one’, and from that point onwards you have QC opinion, however it is irrelevant and meaningless to you, your clients and to your business, because you did not ask the relevant questions or make clear your requirements, but you still have QC opinion.
The Answer;
QC opinion will only stand up if it has been obtained in the correct way, these are the rules you should follow and look for.
Set out the contractual relationships clearly, review each contract at each stage of the process, upper and lower level.
Chart the process, show the flow of documentation, and funds clearly, at each stage, this should show the disbursement of all statutory obligations, for example, tax, vat, etc.
Ensure accurate historical transactions are used to show the movement of funds; proof of what has been operated over a period of time is critical. Its again not what you think is being done, but what actually is.
Finally, all the above points should then be put into notary form in detail by an independent Auditor or independent Tax Advisor, for submission to the QC. From there the QC opinion given will be substantiated through the above three key points.
This notary, produced through your independent tax advisor, once presented to the QC will ensure that the workflow and contractual relationships have been presented correctly to the QC. This will then validate an opinion of the reality of the process, and of course, this should be underpinned most importantly by specific case law from the QC.
QC opinion alone is not robust enough to rely on should you need to, unless supported by case law and having followed the three key points highlighted above.
By Jonathan Tipper, Abacus Labour Outsource Director
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