I wrote the first version of this article back in November 2012. At the time ISS was under investigation by BBC Radio 5, at least the offshore manning agency established in Sark was.
Since then HMRC has been turning up the heat on ISS and other offshore manning agencies. But it’s more than tax and VAT that should be under investigation. Their contractors, had they had onshore contracts, would by now have been building up proper pensions under auto-enrolment. But they’re not and this is a scandal.
Is this the same ISS that provides facilities management?
No it’s not!
The ISS Group in Sark in the Channel Islands pays some 24,000 UK teachers using a system that by-passes VAT and makes its money from not having to provide contractors the benefits of employment they’d enjoy if employed on the mainland.
The full name of this company is International Sub-contracting Services Limited. It refers to itself as providing “Intelligent Salary Solutions” which adds to my confusion.Most of its contractors are teachers , but they don’t seem to be getting much pensions intelligence!
The ISS which provides facilities management adopted its name when it opened in Britain in 1968 and has been in existence in Denmark since 1901. That two organisations, both employing thousands of British employees, can co-exist with such similar names is odd.
But the name is about all they have in common. ISS Ltd (the Danish one) has auto-enrolled since January 2013, while ISS Group (the Sark one), will by-pass auto-enrolment till mid 2017.
The Danish ISS are meticulous in managing auto-enrolment for workers and meeting pension obligations for the sections of their staff who have transferrable defined benefit promises .
Meanwhile, by not being running an onshore payroll, ISS (Sark) are putting those they pay at the back of the auto-enrolment queue. These contractors get lumped in with the Seafarers and oil workers and do not get contributions to their plans till April 2017.
Have ISS Sark got an auto-enrolment pension strategy? I wonder?
If the Sark ISS ever intend to provide their staff with an auto- enrolment pension – it won’t be NEST. NEST don’t accept money from an offshore bank account. Most Qualifying Workplace Pensions won’t take money from offshore bank-accounts – I’m sure you can guess why!
So if you’ve chosen to be employed via ISS in Sark, you don’t just lose out on contributions, you may get a dodgy pension provider too!
If taxpayers are both paying the teachers using a dubious employment agency, then good governance should be applied and the business moved to an umbrella employment company that is committed to paying UK benefits in full as if these sub-contractors were directly employed.
There also needs to be clarity as to what the pension position is, for the thousands of teachers who contract through ISS. ISS gets some VAT savings though operating out of Sark but their contractors are missing out on years of pension contributions and the only winner there is – ISS.