Employment Law Guide 2026: Umbrella companies

Recruitment companies often use umbrella companies to engage the workers they supply. Currently, the umbrella company is responsible for operating PAYE on the wages of the workers they provide. Under changes being made by the Finance Act 2026, the UK recruitment agency that supplies workers to an end-client will be jointly and severally responsible for the umbrella company’s PAYE liabilities. In cases where there is no UK agency in the supply chain, the UK end-client will instead be jointly and severally liable. These changes will apply to payments made to umbrella company workers on or after 6 April 2026.