On Payroll as a Service for Recruitment Agencies

OPRaaS provide end to end solutions with a high-touch, white-labeled, consultative approach that enable recruitment agencies reposition themselves against the competition through optimising the usage of contingent workers (e.g. freelancers, temporary workers, contractors, interims, and consultants) whilst helping them compliantly navigate the changing UK tax and employment legislation such as Off-Payroll Reform (IR35) and the Good Work Plan..

Recruitment Agencies: Why Labour Supply Chain Assurance Is Now a Legal & Commercial Imperative

The Problem: Growing Compliance & Liability Risk

Following the 2024 Budget, recruitment agencies now carry the legal burden of tax and payroll compliance when using umbrella companies and other intermediaries.

Here’s what’s changed:

  • HMRC Will Hold You Responsible: You’re now liable for ensuring PAYE and NIC are correctly deducted and paid.

  • Debt Transfer Risk: If an umbrella company fails, HMRC can transfer the tax debt to your agency—even if you acted in good faith.

  • Criminal Liability: Under the Criminal Finances Act 2017, failure to prevent tax evasion—even unintentionally—can lead to prosecution and unlimited fines​.

This is a legal shift, not a policy suggestion. Risk is now in your hands.

The Hidden Threats in Your Labour Supply Chain

Without effective assurance, you could unknowingly be exposed to:

  • Non-compliant payroll models (mini-umbrellas, loan schemes, off-payroll misuse)

  • VAT fraud: Inability to reclaim VAT if linked to a fraudulent supply chain​

  • Unlawful worker practices: Misclassification under IR35 or CIS

  • Modern slavery: Shared bank accounts, poor housing, withheld documents​

  • Payslip skimming & umbrella margin abuse

HMRC Is Watching

HMRC explicitly warns:

“Failing to take reasonable action to ensure your supply of labour is legitimate can lead to serious legal, financial and reputational risks.”
– HMRC Supply Chain Due Diligence Principles​

The Solution: Labour Supply Chain Assurance by OPRaaS

OPRaaS helps recruitment agencies mitigate risk and meet compliance obligations with practical tools and training aligned with HMRC guidance.

We support you in:

  • Performing due diligence across your supply chain

  • Auditing umbrella payroll models for PAYE, CIS, VAT, holiday pay compliance etc

  • Verifying right-to-work checks and worker classification

  • Avoiding “too good to be true” tax avoidance schemes​

  • Protecting your brand from legal and reputational damage

Protect Your Business. Win Client Trust.

With OPRaaS compliance support, your agency can:

  • Avoid financial penalties

  • Stay off HMRC’s radar

  • Secure preferred supplier status

  • Build trust with clients and contractors

Don’t let someone else’s fraud become your liability.

We provide the following core services to Recruitment Agencies

OPRaaS Assessment & Audit

An end-to-end Off-Payroll Reform solution to ensure your agency and your clients are fully prepared and compliant for the proposed Off-Payroll Reform changes. Our high-touch, white-labelled, consultative approach and services include:

Our model & technology helps agencies optimise and maximise an agency’s clients On/Off-Payroll workforce and supply chain, ensuring visibility, control, and compliance across the end to end hiring and payrolling process.

With an accelerated implementation of six weeks and an on/off-site account team, our partner provides visibility via real-time MI & BI insights and solutions.

  • Assessment & Audit: Educate, Remediate, Determine and Indemnify your On/Off-Payroll workforce 

  • Tax and legal expertise on Labour Supply Chain Assurance as well as on-going support

  • White-labelled technology provision via a one-stop compliance management platform

  • Repositioning your agency as the “Partner of Choice” for clients

  • Future-proofing your agency and end clients against the potential risks and challenges to the changing tax and employment landscape

  • Ensuring your agency retains a competitive advantage

OPRaaS Workforce Management Solutions

OPRaaS partners with a leading UK-based Workforce Management Solution Provider to provide Vendor Management and Managed Service Provision to deliver visibility, control, and compliance over your clients’ contingent workforce.

  • White-labeled MSP capability, training, technology, and on-going support

  • ‘Next generation’ mobile-friendly, easy to adopt technology 

  • Accelerated and methodical implementation

  • Visibility and control of the ‘Off-Payroll’ workforce estate

  • Streamlined hiring and payrolling processes

  • Spend control and optimised spend management over worker estate

  • DaaS – Data as a Service - to provide real-time reporting MI & BI for data-driven decision making

  • Future-ready for the changing tax and employment landscape

Why do Agencies use OPRaaS?

Recruitment agencies face increasing compliance challenges due to the Criminal Finance Act 2017 and evolving tax and employment legislation. OPRaaS provides a comprehensive, end-to-end solution designed to help agencies advise and support their end clients while ensuring full compliance.

By using OPRaaS, your agency can:

✔ Strengthen client relationships

Move from being just a supplier to becoming the ‘Partner of Choice’

✔ Protect client spend and revenue – Secure existing business while reinforcing long-term partnerships

✔ Increase contractor numbers – Attract and retain top talent with a fully compliant supply chain

✔ Generate new revenue streams – Offer additional services and expand your agency’s capabilities

✔ Evolve your value proposition – Develop MSP (Managed Service Provider) capability to stay competitive

✔ Future-proof your agency – Stay ahead of tax and employment legislation changes with a compliant, scalable solution

With OPRaaS, recruitment agencies can confidently navigate compliance complexities while unlocking new growth opportunities.

Why your recruitment agency needs to care about Labour Supply Chain Assurance?

Failing to do so can expose your agency to serious legal, financial, and reputational risks. Non-compliance within the labour supply chain—such as tax evasion, modern slavery, and payroll fraud—can lead to:

  • HMRC enforcement actions, including fines and criminal liability under the Criminal Finances Act 2017.

  • Reputational damage due to association with exploitative or fraudulent practices.

  • Loss of business from clients demanding ethical and compliant labour practices.

Assuring the supply chain protects the agency, its workers, and its clients from these risks​​​.

 

Why your recruitment agency needs to care about temporary workers?

Your Recruitment Agency must care about temporary labour because:

  • They represent your brand on-site.

  • You're legally accountable under supply chain laws.

  • Clients demand more compliance than ever before and ethical treatment.

  • Worker loyalty drives performance and retention.

  • Regulators are watching – non-compliance risks fines and reputational damage.

 

OPRaaS Online Training Course

OPRaaS’s NEW Self-Certification Course in Labour Supply Chain Assurance

The OPRaaS Labour Supply Chain Assurance (LSCA) Self-Certification Audit is a structured, online compliance solution for the entire temporary workforce supply chain:

  • Built around HMRC guidance, IR35, VAT fraud risk, Criminal Finances Act, and the upcoming Employment Rights Bill

  • Offers a compliance report, risk score, and pathway to improvement

  • Designed and delivered by OPRaaS, the UK’s specialist in labour supply chain risk and compliance

This is not just training.

It’s an independent, audit-ready assurance tool that future-proofs your workforce compliance.

This practical, step-by-step, 11-module course is for HR, Tax, Procurement, Recruitment, and Payroll professionals, like you, to identify and mitigate these risks, ensuring a compliant, ethical, and transparent labour supply chain.

  • Non-compliance with PAYE, CIS, and VAT regulations can result in HMRC fines and audits.

  • Allegations of modern slavery, worker exploitation, or unethical practices can severely harm your brand

  • Under the Criminal Finances Act 2017, companies can be prosecuted for failing to prevent tax evasion.

  • Poor supplier oversight can result in legal battles, workforce instability, and business losses.

Keep YOUR Business Compliant with OPRaaS

Contact us to find out how we can help your business.

Interested in working together? Fill out some info and we will be in touch promptly to answer your queries, enroll you on the NEW Online Certification Course, or take you through our onboarding process.

We look forward to hearing from you!