What should recruitment agencies check when choosing an umbrella provider?
Start with the company that will employ your workers, how their pay is calculated and the evidence you can review. Then look closely at the service: who helps a worker before their first payment, who handles a problem and how your agency stays informed.
A good relationship should make pay easier to understand and give you confidence in the checks behind it. Here are six questions worth asking before you add an umbrella company to your preferred supplier list.
Understand your responsibilities under the current rules
For money paid to workers on or after 6 April 2026, the umbrella PAYE rules apply to new and existing supply chains. The agency with the contract to supply workers to the end client is responsible for making sure PAYE is operated correctly. If there is no agency, that responsibility sits with the end client. HMRC can recover underpaid PAYE from them.
The umbrella company keeps its own responsibility to calculate and pay PAYE correctly. It must provide the information the agency or end client needs to check this. The precise position depends on the supply chain, so establish your role rather than assuming another party has it covered. [1]
1 Know who you are appointing
Confirm the legal entity that will employ the workers. Check company details, bank details and relevant insurance, and establish whether another business performs any employer functions. Verify claimed accreditation with the issuing body. Keep a dated record of your checks. [2]
Ask a practical follow-up: ‘If the employing company or the way workers are paid changes, how will you tell us before it happens?’ Your team needs a process it can use, with an owner responsible for reviewing changes.
2 Ask for evidence behind the accreditation
Accreditation and certification give you useful evidence to examine. Ask which entity and services are covered, what is checked, how often checks happen and what information your agency can receive. If an issue is identified, who investigates it and how is the outcome recorded?
NWM is FCSA accredited for Umbrella and CIS. SafeRec certified, with real-time auditing of Umbrella PAYE and CIS payments.
These are important parts of our compliance approach. They should inform your due diligence; they do not remove your agency’s responsibilities under the PAYE rules. Ask us about the evidence available for your review. [1]
3 Follow the pay calculation from start to finish
Ask for an illustration using a realistic assignment rate and working pattern. Can your consultant explain the difference between assignment income, gross pay and take-home pay after reading it? Are the margin, employment costs and holiday arrangements easy to identify?
Check that the provider can supply the information your agency needs for the Key Information Document. Your agency remains responsible for issuing it, even if an umbrella company helps prepare it. HMRC’s guidance also recommends reviewing workers’ payslips and reconciliation statements as part of due diligence. [2]
Decide how you will obtain and handle that evidence securely. A sample document can show how a process is meant to work; ongoing records help you assess what is actually happening.
4 Test the service before you need it
Give the provider a realistic scenario: a new worker starts next week, has never used an umbrella company and is unsure about holiday pay. Who explains it? What needs completing? How will your consultant know they are ready?
Then ask about a difficult week. A timesheet is late, a worker disputes a deduction or an agency payment has not arrived. Agree contact routes, payment cut-offs, escalation owners and how updates will reach the worker and your team.
Specific answers are much more useful than a general promise of excellent service.
5 Look at life after the first payment
Ask workers what they need most: understandable statements, accessible records and a helpful response when something changes. Include those everyday needs in your review.
At NWM, courtesy calls take place after a worker’s first paid week and then every four weeks while they are paid through us. They give workers a regular opportunity to raise questions about their experience.
Eligible contractors can also access NWM My Rewards through their existing personal portal. The programme is available to eligible Umbrella and CIS contractors, subject to its terms. It is an added benefit alongside the payroll service.
6 Keep checking the relationship
Set a review date when you appoint the provider. Bring together payment queries, worker feedback, changes to the business and current compliance evidence. Record what needs resolving and who will follow it up.
HMRC recommends regular, proportionate due diligence. Unexplained employer changes or promises of additional untaxed payments deserve investigation. [2] Your review should be able to change the decision to keep using a provider.
Talk through your requirements with NWM
Bring us your due diligence questions, your onboarding process and the issues your consultants spend time chasing. We can discuss how NWM would support your agency and the people you place, and what you need to review before making a decision.
Talk to NWM about supporting your agency
This article is a practical starting point for provider selection. Your checks and advice should reflect your own contracts and supply chain.