In April 2020 it became mandatory for recruitment agents to provide all agency workers with a Key Information Document (a KID) early in the negotiation process.
A KID is a short document that’s designed to provide complete transparency of the payroll supply chain, and will help you to spot any shady goings on.
Despite this now being a legal requirement, our research has shown that 8 out of 10 contractors who’ve found work via agents since April 2020 have not been given a KID. You shouldn’t have to ask: it should be given to you unprompted. You shouldn’t get fobbed off by being told it’s the umbrellas responsibility – it’s not. The law is plain and simple – a KID should be one of the very first items of correspondence you have with an agent, and should come ahead of the formal contract.
What’s in a KID?
A KID is a useful document, particularly if you’re using an umbrella company. It will list all deductions and payments that are taken from the moment the agent pays the umbrella, to when the net payment arrives in your bank account. It will help you understand things like Employer’s National Insurance, holiday pay provisions, umbrella margin and much more. It can act as a first line of defence to help you spot rouge umbrella companies.
Why aren’t agents providing KIDs?
It may well be that your agent is unaware of the change in the law, it could be that they’ve been too busy with Covid, or perhaps they have something to hide. There are all manner of excuses, but none of them are valid. The law is plain, clear and simple – agents must provide you with a KID, even if you’re outside IR35 (albeit a much simpler KID).
Should I be worried if I’ve not been given a KID?
Yes, we think you should. On one hand, a KID won’t set the world on fire, and bent brollys are very good at hiding their tracks. Even today there are STILL umbrellas promoting illegal tax evasion schemes, and agents profiteering from large commission payments. Even if you do get one, you can’t guarantee that you’ll spot if your umbrella isn’t a rouge.
However, on the other hand, as far as compliance processes go, KIDs are trivial. If your agent is failing to deliver simple compliance tasks, it may set a worrying precedence for more complex compliance matters – be it agency worker regulations, the conduct regulations, off-payroll working / IR35, GDPR, etc.
Also, if you can’t trust your agent to deliver a simple compliance task such as KIDs, can you really trust them to deliver fair IR35 determinations? Or will they just push you into an umbrella and collect a large kickback (listen to our umbrella podcast here for more on this).