This is a common query on Contractor Forums: My Recruitment Agency wants me to use their recommended umbrella company. Do I have to switch?

Normally the simple answer is YES!

Why?

There are 100's of Umbrella Companies and by only using a few the recruitment agency is able to confirm that they are happy with the service that the umbrella company offer. It also makes invoicing and payments simpler if a large number of contractors are with a handful of umbrella companies rather than 100.

Recruitment Agencies will often have a preferred supplier list (PSL) i.e. umbrella companies they'd prefer you to use. In some cases their preferred umbrella company may be owned or managed by the agency. Some often also have an approved supplier list (ASL) which is a list of agencies they don't actively recommend you to use but are happy for you to use if for example you are already with an umbrella company.

Some agencies simply recommend you google and find an umbrella company of your choice. The reason for this is then they can;t be held responsible for any aspects of the service you receive.

JUST BECAUSE YOUR UMBRELLA COMPANY ISN'T ON A PSL OR ASL OF YOUR PARTICULAR AGENCY DOESN'T MEAN IT ISN'T ANY GOOD!

It's normally a case of the agency preferring umbrella companies it is already dealing with and having a maximum number that it is prepared to deal with.

Unfortunately even if you are happy with your existing umbrella company an agency can still insist that you switch unless you have a particularly strong negotiating position. Some agencies that have an ASL or PSL are happy for you to use who you wish so it is worth asking.

PayMatters Umbrella Company deal with over 200 Recruitment Agencies in the UK and are on the approved lists of many of these.