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Recruitment Agency Launch Programme · Stage 3 of 10
Get Legally Compliant
Put the compliance stack in place that governs how you’re allowed to trade — the floor, not the ceiling.
How long
1–2 weeks
You’ll have
A compliant basis to trade from
Steps
5 steps
Resources
3 resources
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01 Step 01
Step 01
Adopt your terms of business
Your terms of business are what make your fees actually enforceable when a placement goes sideways.
Do it yourself
- Set your fee percentage and basis (base salary vs total remuneration).
- Set a rebate scale — the market standard is 100% under 4 weeks, 50% at 4–8, nil after.
- Add a back-door / introduction clause of at least 12 months, and transfer fees for temp-to-perm.
Common mistake · Placing on a handshake, then finding you can’t enforce the fee when the client goes quiet.
Time2–3 days CostLegal review advised DifficultyHardResource for this step
LINKConduct Regulations 2003 — gov.uk guidance
The minimum-standards framework you trade under.
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02 Step 02
Step 02
Build your Key Information Document
Since April 2020 you must give every agency worker a KID before terms are agreed — it’s a legal requirement, not a nicety.
Do it yourself
- Template a KID: who pays them, pay rate, all deductions, holiday, pensions.
- Include the Fair Work Agency’s details (required since April 2026).
- Issue it before agreeing terms, and again on any change of assignment.
Common mistake · Agreeing terms first and issuing the KID afterwards — that’s the wrong way round and non-compliant.
Time~half a day CostFree DifficultyMediumThe workflow that generates these — KIDs, right-to-work, terms — is something we can build into your system.Resource for this step
LINKKey Information Document — gov.uk guidance
What a KID must contain and when to issue it.
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03 Step 03
Step 03
Stand up right-to-work checks
Every worker must be checked — the penalty for getting it wrong is up to £60,000 per illegal worker.
Do it yourself
- Use the online share code + date of birth at gov.uk for a live Home Office status.
- Note codes are valid 90 days, and checks are free.
- Keep each check on file for the engagement plus two years.
Common mistake · Accepting an expired BRP — they’re not valid from January 2026; use the online check.
Time~10 min per worker CostFree DifficultyEasyResource for this step
LINKCheck a job applicant’s right to work
Enter a share code + date of birth for a live status.
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04 Step 04
Step 04
Handle IR35 and umbrellas
On contract desks, getting the tax status wrong lands the bill — and from April 2026 you can be jointly liable for an umbrella’s PAYE.
Do it yourself
- For PSC contractors, get the client’s Status Determination Statement and pass it down the chain.
- If a role is inside IR35, the fee-payer operates PAYE and NICs.
- Do umbrella due diligence — you can be jointly and severally liable for their PAYE/NIC.
Common mistake · Assuming the small-client exemption covers you — agencies have obligations regardless of size.
Time~half a day CostAdvice advised DifficultyHard -
05 Step 05
Step 05
Set your opt-in / opt-out process
A limited-company contractor can opt out of the Conduct Regs — but only if it’s done correctly, before introduction.
Do it yourself
- Take written notice signed by both the worker and their company.
- Get it signed before introduction to the client — after is invalid.
- Never force it, and record it properly.
Common mistake · A one-signature opt-out taken after the introduction — worthless if it’s ever tested.
Time~1 hour to set up CostFree DifficultyMedium
What you’ll have after this stage
- Terms of business that make your fees enforceable
- A Key Information Document template ready to issue
- A right-to-work checking process
- An IR35 and umbrella due-diligence process
- A valid opt-in / opt-out process for contractors