Team FCSA is pleased to announce the publication of our full report on the draft Finance Bill 2025, produced in collaboration with Brabners LLP, BDO LLP, and employment status expert Rebecca Seeley Harris.
The report provides an in-depth analysis of the draft legislation published on 21 July 2025, with a focus on its impact across the temporary labour market. Central to the changes is the introduction of Joint and Several Liability, which will make recruitment agencies jointly liable for any unpaid PAYE and NICs of umbrella companies and other payroll intermediaries. The new rules will come into effect from 6 April 2026.
Chris Bryce, FCSA Chief Executive, said:
“These changes signal a significant shift in where risk lies, particularly for recruitment agencies. Our report is designed to cut through the complexities, helping agencies and suppliers prepare for what’s coming.”
Key findings from the report include:
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Legitimate umbrella companies will not face disruption to their operating models. There will be no need for repapering exercises or software changes, and workers will retain the protections of umbrella employment.
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The measures are squarely aimed at so-called ‘Payroll Pirates’ — illegitimate operators that have caused tax losses and denied workers their rights. Joint and Several Liability will make it far harder for such businesses to access supply chains.
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Broad definitions of both “umbrella companies” and “purported umbrella companies” are expected to close loopholes and prevent avoidance.
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Agencies and end-clients will face greater responsibility and will need robust due diligence processes in place. FCSA Accreditation, Diligence Hub and veriPAYE already provide a strong framework for demonstrating compliance.
The report also highlights areas where further clarity will be needed, particularly in respect of international supply chains and secondary legislation under the Employment Rights Bill, which will create a regulatory framework for umbrella companies.
FCSA’s analysis concludes that the draft legislation, while still open to technical consultation until 15 September 2025, represents a significant step towards tackling non-compliance and levelling the playing field for ethical operators.
View the full report here
