Under the new rules, HMRC’s clear expectation is that agencies actively police their umbrella supply chain. HMRC guidance states that the agency or end client will be responsible for ensuring the umbrella operates PAYE correctly, and that any underpaid PAYE can be recovered from them.
Where a non-compliant umbrella fails to pay the correct taxes, contracts and disclaimers will not prevent HMRC from seeking recovery under Joint and Several Liability (JSL).
The potential exposures for agencies include:
- PAYE income tax for workers.
- Employee and Employer National Insurance Contributions Student Loan repayments.
- Interest and penalties for late or incorrect payment.
HMRC’s own manual confirms that joint and several liability can extend to the full amount of PAYE, NICs and any disguised remuneration for which the umbrella should have accounted. For agencies with high contractor volumes, one non-compliant umbrella could result in a seven-figure tax assessment.
Commenting on the changes, Sean White, Managing Director of Omnia Outsourcing, said: “Now that the Budget has passed, our full focus turns to April 2026 and the incoming umbrella regulations. At Omnia, we fully welcome the introduction of JSL across many of our supply chains.
For too long – and far too often – our clients have been disadvantaged by poor operators in the market who continue to run schemes designed solely to exploit workers, defraud the revenue, or, in some cases, both.
We’re hopeful that this legislation will finally remove schemes such as mini-umbrella and hybrid models, as well as eliminate companies that play fast and loose with certain funds simply to win business.
We’re looking forward to meeting with our current and prospective clients over the coming months to discuss how Omnia will materially minimise risk ahead of April 2026. As an FCSA member, SafeRec-certified provider and one of the fastest-growing professional intermediaries in the market, we believe we are a logical and reliable partner for compliant business in 2026 and beyond.”
The message from Government and professional bodies remains consistent: agencies must be able to demonstrate that they have selected compliant partners and have ongoing assurance that payroll is being run correctly.
