Questions answered
Recruitment agency admin: 30 questions on fees, rebates, the 12-week rule, right to work and AI screening, answered
Short answers for UK recruitment agencies: fees and rebates, transfer fees, the AWR 12-week rule, right-to-work checks and the 2026 law changes.
How is a recruitment fee and rebate worked out?
The fee is the agreed percentage of first-year salary: 18% of £38,000 is £6,840, or £8,208 with VAT. A rebate scale returns part of it if the candidate leaves early. On a 100/50/25 scale over 4, 8 and 12 weeks, a candidate who leaves in week 6 earns the client a 50% rebate, £3,420. Most terms make the rebate conditional on the invoice having been paid on time.
When can an agency charge a temp-to-perm transfer fee?
Only if its terms gave the hirer the choice of an extended period of hire instead, and only if the permanent offer comes before the later of eight weeks after the assignment ended and fourteen weeks after it started. A temp whose assignment ended on 11 September 2026 can still attract a fee if the client offers the job before 6 November 2026.
Source: Conduct of Employment Agencies and Employment Businesses Regulations 2003, regulation 10
How does the agency worker 12-week rule count weeks?
Any week in which the worker does any work in the same role with the same hirer counts as one. A break of six weeks or less pauses the count; a break of more than six weeks starts it again. Sickness pauses it for up to 28 weeks. A worker who started on 6 July 2026 with a three-week gap in August reaches equal treatment on 19 October 2026.
Source: Agency Workers Regulations 2010, regulation 7
What does an agency worker get after 12 weeks?
The same basic pay and working conditions as if hired directly: pay, overtime and shift rates, holiday pay above the statutory minimum, working time and rest breaks. Not occupational sick pay, pension terms, redundancy pay or bonuses that are not linked to personal performance.
Source: Agency Workers Regulations 2010, regulations 5 and 6
Which right-to-work check does a recruitment agency need to do?
For a British or Irish passport, a manual check or a digital check through an identity service provider, done once. For an eVisa, an EU passport holder or anyone with time-limited permission, the Home Office online check with a share code, with the result page kept until two years after the engagement ends and a follow-up check before the permission expires.
Source: Home Office employer's guide to right to work checks
What is the fine for a missed right-to-work check?
Since 13 February 2024, up to £45,000 per illegal worker for a first breach and up to £60,000 for a repeat breach. A correctly done and recorded check gives a statutory excuse even if the worker turns out not to have the right to work, which is why the record matters as much as the check.
Source: Home Office civil penalty code of practice
What does the Employment Rights Act 2025 change for agencies in 2026?
Three changes land on an agency as the employer of its temps: statutory sick pay from the first day of sickness with no lower earnings limit from 6 April 2026, enforcement by the new Fair Work Agency from 7 April 2026, and wider regulation of the sector including umbrella companies. Sick pay is the one that changes a margin.
Source: Employment Rights Act 2025 and the government's implementation timetable
What must a recruitment agency's terms of business include?
No regulation now makes a hirer sign terms: regulation 17 of the Conduct Regulations was removed on 8 May 2016. Send terms before the first CV all the same, stating whether the agency acts as an employment agency or employment business, the fee and how it is calculated, and any rebate. Fee disputes turn on three definitions (introduction, engagement and the introduction period) and one fact: whether the client accepted the terms.
Source: Conduct of Employment Agencies and Employment Businesses Regulations 2003
Can a recruitment agency use AI to screen CVs?
Yes, but the ICO has looked closely. Its audit of AI recruitment tool providers between August 2023 and May 2024 produced almost 300 recommendations and found tools that inferred gender or ethnicity from names and let recruiters filter on protected characteristics. An agency needs a data protection impact assessment, a clear controller and processor split, and a person making the decision.
Source: ICO, AI tools in recruitment audit outcomes report, November 2024
What does a recruitment CRM cost?
On 1 October 2026 three of five CRMs checked showed pound prices on their own pages: Bullhorn at £80 (Starter) and £120 (Core) per user a month, Vincere at £95 per user for two to seven users, and Recruit CRM at £75 per user billed annually. A six-consultant agency pays £5,400 to £8,640 a year before add-ons. Firefish and JobAdder publish no per-user price.
Full guide: Recruitment CRM prices: who publishes them, and what a six-consultant agency pays a year
Source: UK comparison sites, 2026; vendor pages read 1 October 2026
What should an interview confirmation include?
Five facts, the same in the candidate's email and the client's: date and time, length, format and place, the interviewer, and what to prepare. Written separately and by hand, the two emails drift apart, and the candidate arrives at ten for a half-past-ten slot. One source for both, plus a file note, removes the drift.
Can AI run the admin side of a recruitment agency?
The repeatable parts: formatting CVs, confirming interviews, tracking the 12-week clock and right-to-work expiry dates, chasing timesheets and references. It should not shortlist on its own or decide who is put forward. Overlyft can set up an AI assistant that does the first list and leaves the second to the consultant.
How much does it cost to advertise a job on Totaljobs or Reed as a recruitment agency?
On 1 October 2026 Totaljobs listed a Pro job advert at £220 for 30 days, with a first advert for new customers at £69, so ten adverts cost £2,049. Reed listed a Premium job credit at £89 plus VAT as a new customer offer. Reed also gives recruitment consultancies a free allowance once a year, claimed by phone.
Source: Totaljobs and Reed.co.uk recruiter pages, read 1 October 2026
Can a recruitment agency post jobs on Indeed for free?
No. Indeed's UK pricing page says an employer can post three free jobs a month, and the same page says agencies are ineligible for free accounts. An agency pays for Sponsored Jobs, which have no fixed price: you set a budget and are billed monthly or when spending reaches £500, whichever comes first.
Source: Indeed UK pricing page, read 1 October 2026
What must a Key Information Document for an agency worker contain?
The title Key Information Document, an opening statement with the enforcement body's contact details, ten details about the contract, pay, deductions, fees, benefits and holiday, and a worked example of one pay period down to net pay. It must be a separate document of no more than two sides of A4, given before the temp agrees terms.
Source: Conduct of Employment Agencies and Employment Businesses Regulations 2003, regulation 13A
Do agencies need to update their Key Information Documents after the Fair Work Agency took over in April 2026?
Yes, if the document names the Employment Agency Standards Inspectorate. Regulation 13A was amended on 7 April 2026 and now requires contact details for the enforcement officers appointed under the Employment Rights Act 2025, which means the Fair Work Agency. If details change after terms are agreed, a revised document is due within five business days.
Source: Regulation 13A as amended by SI 2026/302; GOV.UK Key Information Document guidance, updated 7 April 2026
How much interest can a recruitment agency charge a client who pays a placement fee late?
Unless the terms set their own rate, statutory interest at 8% over Bank Rate: 11.75% a year for a debt that falls overdue between 1 July and 31 December 2026. On an £8,208 invoice that is £2.64 a day, or £118.90 after 45 days. A fixed sum of £40, £70 or £100 is added, depending on the size of the debt.
Source: Late Payment of Commercial Debts (Interest) Act 1998; GOV.UK late commercial payments guide
Does a recruitment agency have to pay an IR35 contractor's employer National Insurance?
Usually, yes. A medium or large client decides the status, but the agency that pays the contractor's company is the fee-payer. On an inside decision it pays employer National Insurance at 15% above £417 a month, which is £1,137.45 on an £8,000 monthly fee, and cannot deduct it from the contractor's payment.
Source: GOV.UK fee-payer responsibilities under the off-payroll working rules; rates and thresholds for employers 2026 to 2027
How much does an enhanced DBS check cost from 5 October 2026?
From 5 October 2026 the Disclosure and Barring Service charges £41 for an enhanced check, down from £49.50, and £20 for a basic or standard check, down from £21.50. An agency using an umbrella body pays its charge on top: £13.80 and £15.70 a check at the two bodies we read on 1 October 2026.
Source: GOV.UK, DBS reduces fees for checks and Update Service from 5 October 2026; uCheck and Care Check pricing pages, read 1 October 2026
Can a recruitment agency register with the DBS directly instead of paying an umbrella body?
Only if it submits more than 100 DBS applications a year. Registration costs £300 plus £5 for each countersignatory, and the agency must follow the DBS code of practice and be entitled to ask exempted questions. DBS guidance says an organisation needing fewer than 100 checks a year should use an umbrella body.
Source: GOV.UK, DBS checks guidance for employers, updated 11 September 2026
When is the next employment intermediary report due at HMRC and what is the penalty for missing it?
The report for 6 July to 5 October 2026 is due by 5 November 2026. A late report brings an automatic penalty of £250 for a first offence, £500 for a second and £1,000 for a third or later one within 12 months. Continued failure can cost up to £600 a day.
Source: GOV.UK, Employment intermediaries reporting requirements: what this means for an intermediary, updated 30 July 2026
Which workers does a recruitment agency put on its employment intermediary report?
Every worker it supplied to a client and paid without operating PAYE: limited company contractors (code D, with payment details and the Companies House number), sole traders and partnerships (with a unique taxpayer reference) and umbrella workers (code F, no payment details). Temps on the agency's own PAYE payroll are left off.
Source: GOV.UK, How to use the employment intermediaries template
Can a recruitment agency charge a candidate a fee for finding them a job?
No. Section 6 of the Employment Agencies Act 1973 makes it an offence to request or receive, directly or indirectly, any fee from a person for finding them work, outside a short list of entertainment, modelling and sports occupations. An employment tribunal can also ban a person from running an agency for up to ten years.
Source: Employment Agencies Act 1973, sections 3A and 6; Conduct Regulations 2003, regulation 26 and Schedule 3
What is the court fee to claim an unpaid recruitment fee in the county court?
The fee depends on the amount claimed, including interest. GOV.UK lists £205 for a claim of £3,000.01 to £5,000, £455 for £5,000.01 to £10,000, and 5% of the claim from £10,000.01 to £200,000. An £8,208 invoice with £118.90 of interest and the fixed £70 comes to £8,396.90, so it costs £455 to issue.
Source: GOV.UK, Make a court claim for money: court fees, read 1 October 2026
How much does a gangmaster's licence cost for a recruitment agency in 2026?
A gangmaster's licence from the Fair Work Agency costs £3,490 to apply for, inspection included, and £620 a year to renew where turnover in the regulated sectors is under £1 million. The highest band, £10 million or more, pays £8,500 and £4,000. Turnover includes the VAT charged to clients, and neither fee is refunded.
Source: GOV.UK, Fair Work Agency, How to apply for or renew a gangmaster's licence, updated 28 September 2026, read 1 October 2026
Does a recruitment agency need a gangmaster's licence to place permanent staff in a food factory?
Yes. Fair Work Agency guidance says an employment agency supplying a worker for permanent work in agriculture, horticulture, shellfish gathering or food processing and packaging needs a licence, as a temp supplier does. Forwarding CVs for that work counts too. Acting as a gangmaster without a licence carries up to 10 years in prison and a fine.
Source: GOV.UK, Fair Work Agency, Detailed guidance on who needs a gangmaster's licence, updated 15 June 2026, read 1 October 2026
How long does a recruitment agency have to keep candidate and client records?
At least one year. Regulation 29 of the Conduct Regulations 2003 requires records of candidates and clients to be kept for a year from creation and a year from the agency's last service to them. For temps the agency employs, right to work copies run two years after they leave, payroll records three years and minimum wage records six.
Source: Conduct Regulations 2003, regulation 29; GOV.UK pages on right to work checks, PAYE records and enforcing the minimum wage, read 1 October 2026
Do recruitment agencies charge VAT on a temp's wages as well as on their margin?
Yes. HMRC's VAT Notice 700/34 says an agency supplying its own temps charges VAT on the full amount the client pays, including the salary, National Insurance and pension costs it recovers. A £19.50 hourly charge carries £3.90 of VAT, making £23.40. On a permanent placement VAT is charged on the agency's fee alone.
Source: GOV.UK, HMRC, Supply of staff and staff bureaux (VAT Notice 700/34), read 1 October 2026
When does a recruitment agency have to register for VAT?
When taxable turnover for the last 12 months goes over £90,000, or is expected to in the next 30 days alone. For a temp desk turnover is the whole charge to clients, so three full-time temps billed at £19.50 an hour cross the line with the 42nd weekly invoice. A perm desk charging £6,840 a placement crosses it with its 14th fee.
Source: GOV.UK, Register for VAT and VAT thresholds, read 1 October 2026; arithmetic ours
How long does a recruitment agency have to give a temp a revised Key Information Document after their pay changes?
Five business days. If a temp's pay, deductions or payer changes after terms are agreed, regulation 13A of the Conduct Regulations 2003 requires a revised Key Information Document by the end of the fifth business day after the day of the change, and the document must state the date the change takes effect.
Source: Conduct of Employment Agencies and Employment Businesses Regulations 2003, regulation 13A, as set out in our temporary worker placement checklist
AEO Lookup editorial team
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