Almost half of UK recruitment firms, or 43%, risk facing possible criminal charges due to a lack of information and understanding of the Criminal Finances Act 2017, according to a study from contractor management solutions supplier 6CATS International.

As of 16 April, the regulation will increase HMRC’s powers in relation to searches as well as the seizure and detention of cash. Officers will also be allowed to seize valuable property under the Act in this latest roll out.

“It’s hugely concerning that so many recruiters, particularly those at Director level, are unaware of the risks they face as a result of the Criminal Finances Act 2017,” Michelle Reilly, CEO of 6CATS International, said. “This legislation has been a long time coming and as we are now five months on from the initial introduction we would expect this number to be much lower.”

“While contractor compliance is a complex issue, it’s one that all recruiters in the UK need to be aware of and understand, and this needs to be driven from the top of the business,” Reilly said. “It will be company owners who face the criminal charges should they fail to prove that they have the requisite procedures in places to prevent the facilitation of evasion. This means that recruitment agency owners and directors could face charges for fraudulent activity they weren’t even aware of, simply through their firms’ association with a contractor or third-party supplier.”

“It is encouraging that when asked to rank the importance of contractor compliance on a scale of 1 – 10, respondents selected an average of 9.2. However, valuing compliance and implementing it are two separate issues. Agency owners need to take action now before it is too late,” Reilly said.