This is a common question and one which frustrates many contractors, you are not alone!
Recruiters have their own preferred supplier list (PSL) and when you start a new contract you can find yourself being asked to use their trusted suppliers. It’s perfectly reasonable for you to want to choose your own umbrella company, but this can cause tension with recruiters who feel a need to control their supply chain.
In the wake of the Criminal Finance Act, which came into effect on 30th of September 2017, we’ve seen a number of leading agencies tightening up their compliance policies. Some are now insisting on respected industry accreditations as a prerequisite for inclusion in their preferred supplier lists. It’s clear that recruiters are more concerned than ever about compliance, with an emphasis on industry accreditation. We believe this is a positive development, but it still deserves some scrutiny.
On the 29th September 2017, HMRC published this article regarding the court’s decision in the high-profile tax-avoidance case involving Rangers Football Club. In their article, HMRC state their intention to use the ruling to take action against other disguised remuneration schemes.
The reform of off payroll working in the Public sector left many contractors in a situation where some of their contracts will be outside, and some inside IR35. This leaves them with a dilemma, the attraction of operating through a Limited company maximises if the contract is Outside IR35 and contractors can take advantage of a dividend income.
A preferred supplier list, or PSL, is a list of pre-vetted suppliers that you as a recruiter work with. By using a PSL:
