Recruitment agencies sit in the middle of a supply chain that’s under growing scrutiny from HMRC and end-clients. Using accredited umbrella companies is one of the simplest ways to reduce compliance risk, protect contractors, and maintain strong client relationships.
We will only work with Umbrellas who meet a certain standard. Here's why:
Why accredited umbrellas matter
An umbrella company becomes the contractor’s employer and is responsible for PAYE, National Insurance, statutory payments, and issuing compliant payslips. If an umbrella operates poor payroll practices (or promotes disguised remuneration schemes), the fallout can hit everyone in the chain: contractors, agencies, and sometimes end-clients.
Accreditation (from recognised industry bodies) doesn’t guarantee perfection, but it does show the umbrella has been assessed against defined standards and is typically subject to audits, complaints processes, and ongoing checks. For agencies, that means fewer unknowns and a clearer basis for supplier due diligence.
Benefits for recruitment agencies
1) Stronger compliance & due diligence
Demonstrates you’ve taken reasonable steps to vet your supply chain.
Reduces the likelihood of onboarding umbrellas using non-compliant pay arrangements.
2) Lower operational risk
Fewer payroll errors, fewer disputes, and less time spent firefighting queries about deductions, holiday pay, and payslips.
More consistent documentation and processes (contracts, KID/assignment details where applicable, statutory calculations).
3) Protects client relationships
Many end-clients now require evidence of supply chain compliance.
Using accredited umbrellas helps you meet client onboarding standards and avoid reputational damage.
4) Better contractor experience
Contractors are more likely to trust and stay with an agency that offers compliant, transparent umbrella options.
Fewer unpleasant surprises like “too good to be true” net pay promises.
Benefits for contractors
1) Correct PAYE treatment
Proper tax and NI handling reduces the risk of later tax bills caused by schemes.
2) Transparent payslips & deductions
Clear breakdown of rate, costs, holiday pay, pension, and statutory deductions.
3) Statutory rights & protections
Access to SSP, SMP/SPP (where eligible), pension auto-enrolment, and employee rights.
More reliable handling of holiday pay (accrued vs rolled up where lawful/appropriate) and leaver payments.
Key risks agencies are managing by using accredited umbrellas
1) Tax scheme risk (disguised remuneration)
Non-compliant umbrellas may pay via loans/advances or other structures that can trigger serious HMRC action against contractors and reputational damage for agencies.
2) Supply chain liability & reputational harm
Even if the legal liability sits elsewhere, agencies can face client termination, adverse press, and loss of contractor trust.
3) Employment law & payment disputes
Mismanaged holiday pay, incorrect deductions, missing pension processes, or unclear margins can lead to complaints, backpay claims, or escalations.
4) Data and document controls
Better umbrellas usually have stronger GDPR practices, safer onboarding, and consistent audit trails.
How can you check accreditations?
You can use the websites below to confirm whether the umbrella company you, or your contractor, intend to work with meets our accreditation standards. If the umbrella is not listed, we may be unable to support engagement with them. However, we are happy to recommend accredited umbrella companies that can be used as an alternative.
FCSA Directory of Members https://fcsa.org.uk/directory-of-members/
Professional Passport Approved Providers https://www.professionalpassport.com/Approved-Providers?nid=699
SafeRec Certified Umbrellas https://saferec.co.uk/certified-umbrellas
For help or questions, please contact us