April 2026 joint and several liability: what recruitment agencies need to know
Since 6 April 2026, HMRC can recover unpaid umbrella company PAYE from the agency. What that means and how to manage the risk.
Since 6 April 2026, the recruitment agency in an umbrella supply chain can be held liable for PAYE the umbrella company fails to pay. For agencies, choosing an umbrella provider is now a tax risk decision as well as a commercial one.
The rule in one paragraph
For payments to workers made on or after 6 April 2026, if an umbrella company does not account for the correct PAYE, HMRC can recover the underpayment from the agency that contracts with the end client. If there is no agency, it can recover it from the end client. The umbrella company is still responsible for getting PAYE right; the change gives HMRC someone else to pursue if it does not.
What is covered
HMRC's guidance lists income tax, student loan repayments, and employee and employer National Insurance contributions. The rules apply to existing supply chains as well as new ones.
Why this matters for agencies
Non-compliant umbrella schemes often promise workers more take-home pay by paying part of their earnings outside PAYE, through loans, advances or "bonuses". Before April 2026, the tax shortfall from those schemes was mainly the umbrella company's problem. Now it can become the agency's.
What reduces the risk
- Choose accredited providers and check when they were last reviewed.
- Verify payslips, for example through veriPAYE, rather than relying on a provider's word.
- Be suspicious of high take-home pay. If a provider's illustration beats what PAYE allows, ask how.
- Keep records of every check you carry out.
Checks reduce risk; they do not remove liability. HMRC's guidance does not say due diligence or accreditation removes an agency's liability. They reduce the chance of the problem happening in the first place.
Where to read more
Our April 2026 legislation hub covers the rules in more detail, with examples and questions to ask providers. HMRC's own guidance is on GOV.UK.
Need help with this? Our payroll and compliance team can talk it through with you. Talk to our team.
Last reviewed 9 October 2026. General information, not legal or tax advice.