If you are a freelancer, contractor or temporary worker payroll sector stakeholder, you may have heard of SafeRec. The AI-powered software has taken the umbrella company sector by storm and has painted a new path for umbrellas looking to prove to their workers and agencies they operate compliantly with HMRC. In this article, we explain what the SafeRec Certification for Umbrella Company is, who it benefits and why we believe it is a fantastic solution that every contractor should consider when choosing their next umbrella company.
What is SafeRec?
Powered by Artificial Intelligence (AI), SafeRec is a payroll auditing software provider that “revolutionises payroll compliance”. With benefits for every party in the supply chain of temporary workers, SafeRec allows contractors and freelancers to receive real-time audits on every payslip they receive from an umbrella. Every audited payslip undergoes a forensic audit, and an instant report is made available to contractors. Additionally, behind the scenes the payslips issued by SafeRec Certified Umbrella Companies are cross-referenced with HMRC data to ensure that taxes have been accurately disclosed and paid to HMRC.
Additionally, unlike all other solutions in the industry, all payslips are audited in real-time and at source, directly from third-party payroll software.
Who will benefit from SafeRec being introduced into the supply chain?
All parties – simple as that. Let us explain.
Contractors and freelancers using an SafeRec Certified Umbrella Company for payroll
Contractors and freelancers will benefit because they will automatically receive audits on every payslip. The audit will check everything – including the deductions, taxes, NI etc. and a comprehensive report will be provided to all workers allowing them to understand their payslips to ensure that the umbrella has acted ethically and nothing unscrupulous has occurred.
To put it simply, most umbrella companies in the UK operate compliantly. However, taking their word for it is one thing. Now, temporary workers can actively understand that the umbrella company they use is compliant and ethical.
Recruitment agencies that refer temporary workers to umbrella companies
There is much pressure on recruitment agencies to ensure they refer candidates to ethical and compliant umbrella companies. Legislation such as the Criminal Finances Act, Section 44 of the agency legislation, POTAS or the off-shore intermediary legislation set out to target and punish agencies that engage (even not knowingly) with non-compliant umbrella companies.
By referring candidates exclusively to SafeRec Certified Umbrella Companies, recruitment agencies can eliminate the risks associated with a non-compliant referral. Once a payslip is audited, the whole supply chain will receive the results, allowing agencies to collate proof that their candidates are being paid compliantly and ethically (important if an agency is ever faced with an HMRC investigation).
The SafeRec website states:
“SafeRec AI technology protects your agency and candidates against umbrella companies by performing real-time forensic audits of all payslips, ensuring your candidate’s payments are processed compliantly. It also provides your agency with a suite of products to stay compliant, including a Key Information Document Generator.”
There are more benefits to agencies referring candidates to a SafeRec-certified umbrella than just compliance. All candidates will appreciate the added value proposition because it genuinely shows that the agency values compliance and the well-being of candidates.
SafeRec is also extremely simple for an agency to incorporate into its daily operations, and payslip audits are run in real-time. This will reduce an agency’s administrative responsibilities. Oh, and did we mention that it is entirely free of charge for agencies, as the umbrella will be the party who pays for SafeRec’s software?
“SafeRec has created the first and only solution that truly protects” end-hirers
“End-hirers” refers to the organisation where the temporary worker (the agency’s candidates) undertakes their work. Unquestionably, end-hirers will want to ensure their workers are being paid compliantly to ensure that their business is never subjected to an HMRC investigation.
The SafeRec website explains why SafeRec is so helpful for end-hirers. It says:
“Combine SafeRec AI technology with specialised legal advice from a regulated law firm to protect your business and supply chain. From conducting a risk assessment and creating a Criminal Finances Act Policy to ensuring in real-time that your temporary worker’s tax calculations comply with laws and regulations, SafeRec has created the first and only solution that truly protects your business by providing you with documents that prove you have reasonable processes in place to prevent the facilitation of tax evasion.”
What do we think of SafeRec?
The umbrella company sector is currently unregulated. Government regulations for the umbrella company sector are on the horizon. However, regulations are one thing, but how do you know the companies under these regulations will follow the rules rather than saying they are when they actually turn a blind eye and operate unethically?
The Freelancer and Contractor Services Association (FCSA) and Professional Passport are the two leading bodies self-regulating the umbrella company sector, and they are doing a wonderful job. However, not so long ago, a few FCSA-accredited umbrellas were accused of malpractice (salary skimming) – resulting in many people questioning the accreditations offered by these two bodies.
SafeRec has introduced a way of testing that taxes are paid accurately by umbrella company and communicate the confirmation to the workers and supply chains. This is truly groundbreaking. “
You didn’t hear it first, but we want to repeat the message that many industry stakeholders preach – SafeRec is a game-changer. Rather than having to take the word of an umbrella company that it is “compliant” (blah blah), contractors and freelancers now have the power to prove whether they’re being paid as they should. This is extremely valuable.
Temporary workers should always conduct thorough due diligence when selecting an umbrella payroll provider. However, it would be impossible for a non-compliant umbrella to get the SafeRec certification because every audited payslip would be red-flagged or wouldn’t pass the cross reference check with HMRC data.
If you’re a contractor or freelancer, always conduct thorough research when choosing an umbrella, and always be 100% certain you’re being paid compliantly because, after all, you’re responsible for your tax and NI affairs. However, by choosing a SafeRec-certified umbrella, you can work on your assignments with the peace of mind that you’re being paid correctly and no malpractice is going on. More importantly, you will receive an audit report each time you are paid to prove it to you. Surely this is something every temporary worker wants? Comment below and let us know your thoughts.
To summarise the above – what does the umbrellacompanies.org.uk team think of SafeRec? We think it’s a real winner. It adds an entirely new layer of control to the entire supply chain and will allow agencies to make referrals with confidence and workers to get paid knowing they’re receiving the exact amount of pay the government expects (and are paying the correct taxes etc.). We expect to see SafeRec take off over the coming months and years. Why would an umbrella not want to be SafeRec certified? We genuinely don’t know the answer to that question.
Top 10 umbrella companies
If you are on the lookout for anew umbrella company, we have just the resource! Please check out our top 10 umbrella companies. All of our top 10 are accredited by the FCSA or Professional Passport and some have special offers at the moment that you won’t want to miss.