The Importance of Accreditation

The Importance of Accreditation

It’s estimated that there are now over 500 umbrella companies operating in the UK, servicing around half a million freelancers and contractors every year – that’s 15% of the total workforce. 

Most umbrella companies typically offer full employment benefits to workers, as well as dealing with their tax and National Insurance liabilities in a timely and legal manner. However, there are still some umbrellas that are operating outside the law, and tarnishing the industry by association. 

So how can contractors and recruiters be sure that the umbrella company they select will treat them in an appropriate manner? Here we look at the importance of accreditation when you’re choosing an umbrella company.

As it stands

Currently there is no legislation surrounding the umbrella industry. It’s a topic that’s been discussed at the highest levels – the Government ran a consultation on compliance within the market which finished in February 2022, the response to which has been published here. It’s a comprehensive look at how the Government intends to tackle non-compliance within the industry to improve outcomes for workers, protect taxpayers from fraudulent activity, and ensure a ‘level playing field’ for umbrella companies. 

In the absence of laws protecting those involved – the contractors, the recruitment agencies and the end-clients – how can you be sure that you can trust your umbrella company?

The answer lies in accreditation.

What is accreditation?

The most rigorous and important form of accreditation for umbrella companies is from the Freelancer and Contractor Services Association (FCSA).

The FCSA is the UK’s leading membership body for umbrella companies and aims to raise standards, promote compliance and encourage self-regulation in the sector. These aims are important because they support assisting umbrella companies to fulfil their tax and National Insurance obligations on behalf of the contractors they employ.

The body implements a strict Code of Compliance which ensures that its members provide services of the highest possible standards, both professionally and ethically. The Code has seven elements:

  1. Mandatory questions for all applicants 
  2. Umbrella Employers questions
  3. Limited Company Advisors questions
  4. Self-employed / CIS questions
  5. Professional Employment Organisation (PEO) questions
  6. Fixed Term Employment questions
  7. Worker questions

The 13-page Mandatory questions document includes questions about the length of an umbrella’s trading history, the good character of its directors, the validity of its accounts, whether or not it’s based in the UK, and whether all its contractors are paid in the UK. 

But that’s not all. There is also an additional 35-page document relating to the treatment of employees, seven pages of general information questions, a 14-page questionnaire on Limited Company Advisors and 18 pages of questions about Professional Employment Organisations. And the answers to all of these questions provide a comprehensive and thorough snapshot of the company’s behaviour, attitude and general regard for both the law and its treatment of its workers and professional partners.

i4 Services’ Accreditation

We’re extremely proud to say that we’re FCSA Accredited. This means that we’ve been through one of the most stringent accreditation processes there is. It takes almost a year to become accredited, and during that time every aspect of our business is investigated and scrutinised. We underwent due diligence tests, completed ‘Fit and Proper Person’ tests for each of our directors, had our business reviewed by FCSA Code Assessors (qualified tax advisors and solicitors), submitted files of paperwork, and had samples of our work scrutinised. We also welcomed the assessors to our offices so they could interview team members, ask us hypothetical scenario questions, and guarantee that the compliance we talk about exists in practice. And what’s more, we are reviewed every year, so that we can prove that we take the wellbeing and financial security of our contractors and professional partners seriously. 

The FCSA Accreditation process is renowned for being stringent, asking for prerequisites that less scrupulous umbrella companies will never be able to reach. That’s why it’s important to partner with an umbrella company that is FCSA Accredited, because without compliance the livelihoods of thousands of contractors, recruiters and end-clients is at risk.

We’d also advise monitoring the current list of named tax avoidance schemes, promoters, enablers and suppliers which is published and updated regularly on the Government website, providing a clear list of providers to avoid.

If you’d like more information about the range of compliant services we offer to contractors, recruiters or other organisations, you can call us on 0203 603 1290, email us at, or fill in the contact form here.