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What is the Importance of a PSL for Recruitment Agencies?

Last updated on Monday, June 12, 2017

Written by Andrew Trodden

The number of payroll providers for the self-employed in the United Kingdom is on the rise. However, how many of these companies can you trust to provide an efficient, reliable and compliant service for your recruitment consultants and your candidates? It has never been so important for recruitment agencies to have a Preferred Supplier List (PSL) consisting of a small selection of payroll providers with a proven track record in the industry.

When you select a new contractor accountant or umbrella company to add to your PSL, you need to be confident in their ability to satisfy the requirements of your agency and your candidates. There are three relationships that you must ensure work harmoniously:

  • Your agency and the payroll provider – when your consultants’ need help and support from the payroll provider, it must be available quickly. Ongoing communication is also imperative so you can be kept up to date with the progress of your candidates and any alterations to industry legislation.
  • Your agency and your candidate – it goes without saying that you want to make life as easy as possible for your candidates so that they have a positive experience. Therefore, when you refer them to a payroll provider, you want the level of service they receive to be excellent. If it isn’t, your agency will look bad, as will the payroll provider.
  • Your candidate and the payroll provider – when you refer a candidate to a payroll provider, the registration and sign up processes that are in place must be simple and proficient. Your candidates must have complete trust in the payroll provider throughout their time using them.


Some payroll providers (including Churchill Knight & Associates Ltd) are able to provide services that cover all of your candidates’ requirements. These include contractor accountancy, PAYE umbrella and CIS. Your agency should jump at the opportunity of adding a multiple payroll service provider to your PSL. This is because you can refer your candidates to them knowing that whatever their requirements are, they will be met.

Since the introduction of the Intermediaries Legislation (IR35) in 2000, the recruitment industry has been constantly bombarded with new and complicated pieces of legislation, many of which have understandably caused confusion. Most recently, HMRC changed the way organisations and the self-employed operate in the public sector and there are rumours these changes may be introduced into the private sector at a later date. Therefore, you will want to make sure that the payroll providers you add to your PSL are completely up to date with the latest goings-on. If any of your consultants are uncomfortable with some of the legislative changes or would like more information, they will want to be able to contact your preferred payroll providers and request easy to understand guidance and support as part of the working relationship.

When your agency decides whether or not a payroll provider is worthy enough to make it on your PSL, you should be looking to start a new and exciting partnership with a business which your consultants and your candidates can depend upon. Make sure you have positive answers to the following questions before committing to a new preferred supplier:

  • Is their website full of useful and up-to-date information?
  • Are their employees knowledgeable and easy to communicate with?
  • How will they ensure your agency is familiar with every piece of relevant legislation?
  • Can you trust the payroll provider to keep your candidates up-to-date with the latest goings-on in the industry and provide them with a lawful and ethical service?

Before you commit to adding a new contractor accountant or umbrella company to your PSL, it is essential they are able to prove their compliance with HMRC rules and regulations. There is a number of UK based industry bodies that regulate contractor accountants and umbrella companies and your agency should only partner with providers who are approved by these organisations:

Professional Passport is an independent auditor that works very closely with HMRC and industry trade bodies to propose solutions for any issues related to the flexible workers market. In addition, Professional Passport audits accountancy suppliers to help ensure the service meet their regulatory standards. They provide a highly prestigious accreditation for both contractor accountants and PAYE umbrella companies.

APSCo (The Association of Professional Staffing Companies) is the only trade body dedicated to representing the interests of the UK Professional Staffing industry and recruitment agencies in particular, ensuring members offer the highest standards of trading practices.

There are a growing number of unethical providers entering the payroll market, some of whom are promising contractors over 90% pay retention. These companies are being relentlessly pursued by HMRC as it continues to crack down on tax avoidance schemes. HMRC have the ability to retrospectively fine contractors and providers of these schemes, dating back to 1987. Not only that, recruitment agencies can be fined for promoting the use of unethical arrangements; another reason why you should ensure your PSL consists of compliant and accredited providers.

In the highly competitive market of contractor accountants and umbrella companies, there are a lot of worthy contenders for your PSL. It is in your agency’s interest to select a small number of firms you can have complete trust in. Don’t forget - it should be regarded as a fantastic and exciting achievement for any payroll provider to make it onto an agency’s PSL. Make sure you have a procedure in place to regularly review the business on your PSL.

Since 1998, Churchill Knight has helped over 20,000 contractors get paid in full compliance with HM Revenue & Customs (HMRC) and UK tax legislation. The number of contractors we work with is constantly increasing and referrals from recruitment agencies are a huge contributing factor. We are being accepted on an ever increasing number of Preferred Supplier Lists because of our comprehensive capabilities (limited company accountancy, PAYE umbrella and CIS) and expect this to continue to grow in the future.

Churchill Knight understands that every recruitment agency is different. As such, we will provide your agency with a tailored partnership to ensure your requirements are more than satisfied. Below are just a few of the benefits available to your agency when you add Churchill Knight to your PSL:

  • Free membership to Professional Passport and £5 million debt transfer insurance.
  • Training for your consultants from our highly trained specialists at no extra cost.
  • Regular updates on the statuses of your candidates.
  • Exceptional communication because you will be assigned your own Account Manager.
  • Exclusive access to expert industry insights, including the Churchill Knight “Recruiter Guide” series.
  • Much more.


To request more information, or to arrange a meeting at your office, please give our dedicated Agency Team a call on 01707 671645 or contact us online here.

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