The 6th April 2026 deadline has passed. Joint and several liability for umbrella company PAYE is no longer a coming change. It’s here.
From this date, HMRC can pursue recruitment agencies directly for unpaid PAYE and National Insurance contributions when an umbrella company in their supply chain fails to account for them correctly. Approximately 30,000 recruitment agencies and 700,000 umbrella workers fall within scope. The government estimates the measure will protect £715 million in tax revenue in 2026-27 alone.
The question isn’t “are we ready?” It’s “are we compliant?”
What Joint and Several Liability Means in Practice
The legislation places joint liability on recruitment agencies where their umbrella company partners fail to account correctly for PAYE and National Insurance. HMRC has made clear that agencies are expected to conduct regular, documented compliance checks on every umbrella supplier in their supply chain.
There is no fixed checklist. There is no certification that automatically removes liability. What HMRC will look for is evidence. Can you demonstrate that you assessed your umbrella partners? Can you show that assessment was ongoing, not a one-off exercise carried out six months ago and never revisited?
If the answer is no, you are exposed.
What Good Due Diligence Looks Like
Documentation is everything under joint and several liability. Agencies need records that show which umbrella companies they work with and since when, what compliance checks were carried out and when, what evidence was obtained to support those checks, and what action was taken where gaps were identified.
Working with FCSA-accredited umbrella companies is one of the clearest ways to demonstrate that due diligence has been done. Our Members are independently assessed against the FCSA Code of Compliance, which covers PAYE, National Insurance, holiday pay, and worker rights. That assessment is ongoing, not a one-time exercise.
Don’t Wait for HMRC to Find the Gaps
Some agencies will take the view that enforcement will be slow to start. They may be right in the short term. But liability doesn’t wait for enforcement. The moment a non-compliant umbrella company fails to account for PAYE correctly, the agency that placed workers through them is potentially on the hook.
The time to address this isn’t after a liability notice arrives. It’s now.
We’ve supported agencies through the run-up to joint and several liability, and we can help you establish a compliant, documented supply chain. Don’t wait for HMRC to find the gaps.
Find an FCSA-accredited Member at fcsa.org.uk.
