Cloned again: an umbrella company founder's warning on fraud, JSL and Companies House

On July 1st 2026, we received a call from another umbrella company questioning our practices.

How we found out our umbrella company had been cloned

They had been told that us — “Clarity” —  were attempting to undercut competitors by presenting agencies with payslips showing only minimum wage payments and no balancing payslip summary.

This two-fold payslip omission is what we ourselves deem a massive ‘red flag’ that we regularly tell contractors to look out for, and not to accept, so we knew it wasn’t something we’d have anything to do with.

As the conversation with the complainant unfolded, the truth became clear — our business, an umbrella company, had been cloned, writes Lucy Smith, founder of Clarity Umbrella Ltd.

The imposter tactics

Using a name that could be easily mistaken for ours, a seemingly fraudulent umbrella company had been approaching agencies, offering to increase contractors' take-home pay and undoubtedly kickbacks in exchange for a bulk transfer of workers.

Fake documents and fake accreditation claims

To make their proposition appear credible, the imposter umbrella had supplied agencies with fake documentation, including corporate documents fraudulently amended to appear as though they belonged to us, Clarity Umbrella Ltd.

The imposter umbrella, using a similar name to ours, had even claimed it was operating with both FCSA Accreditation and SafeRec Certification.

The fact that another umbrella company – the complainant -- initially questioned what it thought were our practices, rather than immediately recognising the attempted fraud, demonstrates just how convincing these operators can be.

Is HMRC's Joint & Several Liability rule fuelling fraud?

Standing back from what was a very stressful situation, I’ve come to the opinion that the pressure created by HMRC’s Joint & Several Liability legislation appears to be driving some more unscrupulous businesses to increasingly desperate measures in the pursuit of quick wins.

While the JSL legislation places greater emphasis on agencies carrying out thorough ‘due diligence’, we know there will always be those prepared to take information at face value, particularly when presented with professional-looking documents and attractive commercial promises.

Genuine due diligence failures vs deliberate tax avoidance

Supply chain parties, potentially well-meaning, taking information at face value is not as bad as those who are still promoting, enabling or supplying tax avoidance schemes.

These are the providers of arrangements offering to enhance contractor take-home pay.

How JSL is pushing fraudsters toward cloning

Interestingly, when the director of the fraudulent business was challenged publicly by us on LinkedIn, there was no response.

This leads me to one of the unintended consequences of the new JSL legislation. Rather than eliminating poor practice overnight, it has created an environment where fraudsters are simply adapting their methods. Instead of relying solely on disguised remuneration schemes, or misleading payroll models, some are now cloning the identities of reputable businesses to gain credibility with agencies.

This cloning creates an additional burden for compliant providers.

Not only are reputable, transparent, rule-following  umbrellas likes us investing significant time and resources into maintaining the highest standards of compliance, but we must now also defend our reputation against businesses willing to impersonate us — the legitimate organisations.

How can agencies be confident they are dealing with the right umbrella company?

Accreditations from a recognised industry body (such as FCSA and SafeRec) are not easy to obtain. They involve rigorous independent assessments and ongoing compliance requirements, making them difficult for non-compliant businesses to achieve. That means agencies should never rely solely on documents provided by a prospective supplier.

Instead, (and in the case of the two mentioned) verify accreditation directly through the official FCSA and SafeRec websites. Your goal is to make sure the business you are engaging with is genuinely who it claims to be.

How can contractors be confident they are dealing with the right umbrella company?

Contractors should be equally vigilant about the identity of an approaching umbrella company, particularly if they are being required to move to a different umbrella, which is happening as Preferred Supplier Lists shorten under JSL.

If unsure about an umbrella’s identity, contractors should:

• Ask your agency what ‘due diligence’ has been undertaken
• Request confirmation from the agency that the umbrella company has been properly vetted
• Don't be afraid to ask questions to the agency or the umbrella around any of your suspicions.

Remember, while JSL may transfer liability for employment costs to agencies in many circumstances, any personal tax liability can still rest with the taxpayer -- the contractor. HMRC as good as told ContractorUK this on June 22nd.

What's the bottom line for contractors suspicious of an umbrella?

The bottom line as a contractor with suspicions if your brolly is the genuine article or an imposter is that if the ‘umbrella company’ is subsequently found to be operating an avoidance scheme, or is not the business it claims to be, the consequences can still be significant for the individual worker.

Ultimately, everyone in the supply chain has a responsibility to ensure the businesses they engage with are legitimate.

Hasn't Clarity Umbrella Ltd been cloned before?

This is now the second time that we, Clarity Umbrella Ltd (company number 12210720)have had our business cloned.

In one sense, perhaps we should take it as a compliment that fraudsters consider that we have a reputation worth stealing! If impersonating us helps them gain access to agencies, it reinforces the value of the trust we have spent years building.

However, the bigger question is:

Why is it so easy for legitimate umbrellas to be cloned?

It’s easy to clone an umbrella because, in my view, Companies House don’t make it difficult enough not to.

Indeed, perhaps the spotlight should turn to the process of setting up a company, and how rigorous those checks and balances are, if the UK is serious about defeating cloning.

Does Companies House identity verification go far enough?

In other words, should Companies House be carrying out more robust identity checks on directors before businesses are incorporated?

In this latest case of cloning to hit us, the named director appears to have virtually no online presence at all. For all we know, they may not even exist!

If the UK umbrella market is serious about tackling fraud and protecting contractors, agencies and compliant providers alike, then strengthening due diligence at every stage—not just after a company has been formed—must surely be part of the conversation.

What to do if Benjamin calls?

In the meantime, if someone wants to have a conversation with you, claiming to be “Benjamin” and from something that sounds like Clarity Umbrella Ltd (but isn’t), I’d strongly urge you to hang up.