From 6 April 2026, significant changes to PAYE and National Insurance enforcement will take effect across the UK labour supply chain. These reforms — known as Joint and Several Liability (JSL) — will impact contractors, freelancers, umbrella companies, recruitment agencies, SMEs, and end-clients.
Understanding these changes early is essential.
At GR Ace Legal Compliance, I support individuals and organisations across all sectors to prepare with clarity, confidence and tailored legal guidance.
🔍 What Is Changing?
From April 2026, HMRC will have expanded powers to recover unpaid PAYE and NICs from any party involved in a supply chain, not solely from the umbrella company responsible for payroll.
This means:
- Recruitment agencies may be liable
- End clients may be liable
- Any party in the chain may be held responsible, depending on HMRC’s assessment
The purpose of these reforms is to reduce non-compliance and protect workers from misleading or unsafe umbrella arrangements.
✔️ Who Is Affected?
These legislative changes apply to:
- Contractors and freelancers
- Umbrella companies
- Recruitment agencies
- SMEs and larger businesses
- Any organisation supplying or engaging temporary or umbrella-employed workers
If you operate anywhere within a labour supply chain, the JSL rules apply to you.
⚠️ Why Choosing a Compliant Umbrella Company Matters
Government reviews have highlighted ongoing concerns within the umbrella sector, including:
- Disguised remuneration schemes
- Unlawful or hidden deductions
- Misleading “high take-home pay” claims
- Poor payroll transparency
Because JSL enables HMRC to pursue liability across the entire chain, choosing a reputable, compliant umbrella provider is essential.
Here are examples of well-established organisations in the industry that provide useful, compliance-focused resources:
Umbrella Companies & Industry Providers
- Bishopsgate — transparent PAYE operations and strong compliance reputation
- NumberMill — accountancy and payroll services with a compliance-driven approach
- Clarity Umbrella — known for ethical, straightforward umbrella PAYE processes
These organisations offer valuable guidance and industry insights for individuals, contractors and businesses seeking compliance information.
🧩 How to Prepare — Practical Steps You Can Take Now
To reduce risk ahead of the 2026 JSL rollout:
- Review your current umbrella or agency relationships
- Request evidence of PAYE/NIC payments, audits or accreditations
- Update contracts and onboarding processes to reflect the new rules
- Avoid umbrellas promising “enhanced take-home pay” or unusual tax structures
- Seek legal guidance early if anything feels unclear, non-compliant or high-risk
A little preparation now can prevent costly issues later.
🤝 The Right Support — From Multiple Trusted Sources
The recruitment and contractor sectors benefit from a range of specialist organisations that provide education, training and compliance updates.
Lawspeed, for example, offers:
- Industry insights
- Legislative updates
- Compliance seminars
- Recruitment-focused legal guidance
They are hosting a seminar in January 2026, view their Events page for further information.
Whether you’re a contractor, freelancer, business owner or agency, you don’t have to navigate these changes alone.
Get in touch if I can help at www.gracelegal.net or DM me at @grace.legal2025 or contact me via info@gracelegal.net.