There are a number of reasons why recruitment agency might have a PSL comprising their preferred umbrella company partners, the most prevalent are listed below:
- To help workers with their payroll and remain compliant with HMRC
- To protect the agency’s reputation. An agency will tend to only recommend those providers who can meet the needs of their clients and not cause unnecessary difficulties or stress.
However, the main reason, particularly from April 2026, that an agency would have a PSL is because of Joint & Several Liability.
This means that in many cases, should a non-compliant umbrella company fail to make the correct deductions for tax & national insurance, the agency in the supply chain would be liable for the shortfall. Learn more about Joint & Several Liability and what it means for your agency, here.