Michelle Reilly | 40 Outstanding Global Women 2023

Challenges in a global economy

6CATS provides tax and compliance solutions to professionals operating around the globe enabling them to operate legally as well as working with recruiters and firms placing specialists directly. The firm plays a key role in making sure that contractors are legally allowed to work, are paying the right amount of tax, and are able to apply for work permit extensions and visas where necessary.

In her early career Michelle moved to Singapore to work for Lencom Networks, a Finnish company, as their global compliance manager. That involved building solutions to move telecoms engineers all around the world, including Africa, South America, the Middle East and Europe. She returned to be based in London and worked across Finland, Scotland and Brazil. She was headhunted by the owner of CXC Global to set up their European division in 2008. In 2016 she led an MBO of CXC Global to create 6CATS.

“We wanted to be very transparent and compliant and sometimes that means having to give clients the news that things will take a little longer,” she says. “In the industry there is a culture where companies give very short notice around starting a project and using contractors. There is a demand for speed. They start the project with the idea that they will fix the compliance and tax issues later, but then issues don’t get fixed.”

Demand grows for remote contractors

6CATS is seeing a much higher demand for remote workers, partly due to COVID but also to do with the problems caused by Brexit.

“People did not necessarily consider the instant immigration impact that Brexit would have,” she says. “UK nationals not able to work in Europe without a work permit and a similar situation emerging for European nationals trying to come into the UK. In addition, we are certainly seeing more of a demand for remote workers in all different locations.

“Remote hiring carries compliance risk. If the client doesn’t have an entity in that country, they need to work out how that person is going to be paid, how they’re going to pay tax and how they’re going to be become compliant. They need to consider if there is going to be a risk for the end user if they’re paying somebody in that country. Due to the demand for workers to be supplied quickly, companies are not always considering the implications of employing someone in this way.”

She says that as a result the industry is seeing “a bit of a backwards fix” where companies with workers already in a country are having to sort out compliance after they enter a jurisdiction. This carries a reputational risk for the end user, and it can also carry heavy penalties and fines.

“We have seen instances where the tax authorities go on site and decide to audit expat workers and contractors,” she says. “They will carry out an immigration check, find out if they are paying tax and Social Security correctly. The liability is automatically passed back to the end user. That can also sour the relationship for a company who is supplying those workers to the end user. They will be reluctant to work with them again if they know their procedures are not compliant or they have put those workers in a difficult or illegal situation.”

Michelle’s approach to management is to look at transferable skills, rather than specific experience or skillset.

“Since starting 6CATS we have always been a fairly diverse company,” she says. “I like to employ people that are just brilliant at doing their job. It is a very unique business and it is very niche, and so I employ apprentices, people with no experience, who have the right attitude and enthusiasm, and whom I can train up.”