By Lauren Bradford, Head of Compliance and Assurance
Understanding the Upcoming Umbrella Company Legislation and Joint & Several Liability
On 6 April 2026, new rules under the Finance Bill 2025-26, introduced through the Income Tax (Earnings and Pensions) Act 2003, will come into force, changing how responsibility for PAYE and National Insurance Contributions (NICs) is shared across labour supply chains. The legislation introduces joint and several liability, meaning that liability for unpaid tax can extend beyond the umbrella company to include recruitment agencies and, in some cases, end clients.
Implications for Agencies and Clients
While the legislation aims to raise standards and reduce non-compliance across the umbrella market, it represents a significant change in risk allocation. HMRC will have discretion to pursue any party in the chain, whether the umbrella, agency, or client, for unpaid PAYE and NICs. This creates a strong incentive for all parties to maintain oversight and ensure compliance throughout the supply chain.
The position for clients is also important, as liability can extend to an end client if the umbrella company is engaged directly, or where the umbrella is engaged through a connected person. This might include a parent company, subsidiary, or another entity with shared ownership or control. In other words, liability may arise even where the contractual structure appears at first glance to sit elsewhere in the chain.
Ganymede’s Approach
As an FCSA Recruiter Partner, Ganymede is working closely with its umbrella supply chain to maintain transparency and oversight. The focus is on due diligence, compliance monitoring, and collaboration across the supply chain to strengthen accountability. These measures are designed to ensure that all parties in the chain operate in line with the new legislation, helping to safeguard both Ganymede and our clients from potential exposure under the joint and several liability rules.
We have also sought the perspective of the FCSA to reflect the wider industry approach. Deb Murphy, Head of Operations at the FCSA, said:
“Joint and several liability makes one thing absolutely clear, every link in the supply chain needs to be confident in who they are working with and how compliance is being managed.
Using accredited providers is more important than ever, and FCSA Accreditation gives agencies and clients independent assurance that the umbrellas they engage meet the highest standards. In addition, tools like veriPAYE and Diligence Hub add an extra layer of transparency, allowing agencies to evidence payslip compliance, review financial stability, and maintain clear oversight. Strong partnerships, open communication, and consistently checking the basics will make all the difference as the new rules come into force.”
This reinforces the importance of awareness across the supply chain and careful preparation ahead of the new legislation.
More information on the draft legislation can be found here.