People Group Services Limited Company Number: 11570329

Supply Chain Due Diligence Policy

Policy Statement

People Group Services Ltd (“PGS”, “the Company”) is committed to maintaining the highest standards of compliance, transparency, and ethical conduct across its entire supply chain.

In light of increasing regulatory scrutiny, including the introduction of Joint and Several Liability under Chapter 11 of the Finance Act 2025 (effective April 2026), PGS adopts a zero-tolerance approach to non-compliance within its labour supply chain.

This policy establishes the framework by which PGS identifies, assesses, monitors, and mitigates risks associated with all third parties, including but not limited to:

• Recruitment Agencies
• Managed Service Providers (MSPs)
• Umbrella Companies
• Payroll Providers
• Professional Employment Organisations (PEOs)
• End Clients (where relevant to supply chain risk)

Objectives

The objectives of this policy are to:

• Ensure full compliance with UK tax, employment, and regulatory obligations
• Protect PGS and its partners from financial, legal, and reputational risk
• Mitigate exposure under Joint and Several Liability (JSL) provisions
• Promote transparency and accountability throughout the supply chain
• Ensure workers are treated fairly and paid correctly
• Maintain alignment with HMRC requirements and best practice standards

Scope

This policy applies to:

• All entities engaged in the supply, engagement, or payment of workers
• All PGS group companies, including:
  • People Pay Limited
  • People Umbrella Limited
• All internal staff responsible for onboarding, compliance, payroll, and supply chain management

Regulatory Framework

This policy is aligned with, but not limited to:

• Finance Act 2025 – Chapter 11 (Joint and Several Liability)
• Income Tax (Earnings and Pensions) Act 2003 (ITEPA)
• Employment Rights Act 2025
• Agency Workers Regulations 2010
• Modern Slavery Act 2015
• Data Protection Act 2018 / UK GDPR
• HMRC RTI (Real Time Information) requirements

Due Diligence Principles

PGS operates on the following core principles:

Transparency

All parties must provide full and accurate information regarding payroll practices, tax treatment, and worker engagement models.

Verification (HMRC-First Approach)

PGS prioritises validation against HMRC systems, including:

• Real-time PAYE account verification
• Payslip calculations checked against HMRC tools
• RTI submission analysis

Accountability

Each entity in the supply chain is responsible for its obligations. PGS will not tolerate structures designed to obscure liability or avoid tax.

Proportionality

Due diligence intensity is risk-based, with enhanced scrutiny applied to higher-risk entities.

Supply Chain Onboarding Requirements

All new supply chain partners must undergo a structured onboarding process, including:

Corporate Verification

• Certificate of Incorporation
• VAT Registration
• PAYE reference numbers
• Registered office and trading address verification

Financial & Tax Compliance

• Evidence of PAYE and NIC compliance
• HMRC payment history (where available)
• Confirmation of RTI submissions

Operational Due Diligence

• Payroll process review
• Worker contract structures
• Holiday pay methodology
• Use of intermediaries

Compliance Accreditation (where applicable)

Preference is given to organisations with:

• Professional Passport accreditation
• APSCo Trusted Partner status
• SafeRec accreditation (or in-progress status)

Insurance Requirements

• Employers’ Liability Insurance
• Public Liability Insurance
• Professional Indemnity Insurance

Ongoing Monitoring & Verification

PGS conducts continuous monitoring of all supply chain partners, including:

Payroll Verification

• Payslips validated after every payroll run
• Cross-checking against HMRC calculation methodologies
• KID (Key Information Document) issuance per payslip

HMRC Payment Validation

• Real-time verification of PAYE liabilities
• Confirmation of payments made to HMRC
• Schedule-to-payment reconciliation

RTI Reporting

• Worker-level reporting
• Agency-level reporting
• Company-wide reporting
• Exception and anomaly detection

Periodic Reviews

• Annual or risk-based compliance audits
• Re-verification of documentation
• Supply chain mapping updates

Risk Assessment & Categorisation

Supply chain partners are categorised based on risk:

• Low Risk – Fully accredited, transparent, and compliant
• Medium Risk – Minor gaps or pending accreditation
• High Risk – Lack of transparency, unusual payment structures, or compliance concerns

High-risk entities are subject to:

• Enhanced due diligence
• Increased monitoring frequency
• Potential suspension or exclusion

Red Flags & Non-Compliance Indicators

PGS actively monitors for warning signs, including:

• Unusually high take-home pay percentages
• Lack of PAYE/NIC transparency
• Delayed or missing HMRC payments
• Complex or opaque supply chain structures
• Use of offshore or non-standard arrangements
• Refusal to provide documentation
• Inconsistent RTI reporting

Escalation & Remediation

Where risks or breaches are identified:

1. Initial Review – Compliance team investigation
2. Formal Notification – Written request for clarification
3. Remediation Period – Defined timeframe for resolution
4. Enhanced Monitoring – Increased scrutiny during remediation
5. Suspension or Termination – If unresolved or high risk

PGS reserves the right to immediately suspend relationships where there is material risk of non-compliance or financial exposure.

Joint and Several Liability (JSL) Mitigation

To mitigate exposure under JSL:

• PGS validates payroll calculations against HMRC tools
• Confirms payments to HMRC using real-time verification
• Maintains full audit trails and reporting
• Enables transparency for agencies and MSPs via its portal
• Supports supply chain partners in demonstrating compliance

Data Protection & Confidentiality

All due diligence activities comply with:

• UK GDPR
• Data Protection Act 2018

Data is:

• Processed lawfully and transparently
• Limited to necessary information
• Stored securely
• Redacted where appropriate

Roles & Responsibilities

• Compliance Team – Conduct due diligence and monitoring
• Finance Team – Verify financial and HMRC-related data
• Operations Team – Manage onboarding and relationships
• Senior Management – Oversight and policy enforcement

Training & Awareness

PGS ensures relevant staff receive training on:

• Supply chain risk
• JSL implications
• Payroll compliance
• Fraud detection

Policy Review

This policy will be reviewed:

• Annually; or
• In response to legislative or regulatory changes

Declaration

This Policy is approved by the Board of Directors of: People Group Services Limited Company Number: 11570329

Last updated: 31st March 2026