From April 2026, new legislation is being introduced that will significantly change how employment tax risk is managed when umbrella companies are used within labour supply chains.
This reform, known as Joint & Several Liability (JSL), is designed to address non-compliance in the umbrella market and ensure that PAYE and National Insurance contributions are correctly deducted and paid to HMRC.
At Scantec, we welcome these changes and believe they reinforce the importance of robust compliance and transparency across all contingent labour arrangements.
What is Joint & Several Liability (JSL)?
Under the new rules, where an umbrella company fails to correctly account for employment taxes, responsibility for unpaid tax will no longer sit solely with the umbrella provider.
Instead, HMRC will be able to transfer that liability further up the labour supply chain – potentially to:
- The recruitment business (employment agency), or
- The end client, where no agency is involved
This represents a major shift in accountability and places increased emphasis on ensuring that any umbrella company used is fully compliant.
The legislation is expected to apply from 6 April 2026 and forms part of the Government’s wider plans to reduce tax avoidance and improve standards across the umbrella sector.
Why is This Change Being Introduced?
HMRC has raised concerns for several years about a minority of umbrella companies operating non-compliant or avoidance-based models.
These practices can include:
- Failure to remit PAYE deductions
- Disguised remuneration arrangements
- Incorrect or unclear payslip structures
- Umbrella businesses dissolving before liabilities are paid
The introduction of JSL is intended to ensure that compliant businesses are protected and that those who engage labour through umbrella structures have appropriate oversight.
What Does This Mean for Scantec Clients?
For organisations engaging workers via umbrella companies, the new rules increase the need for assurance and visibility over the supply chain.
However, it is important to highlight that Scantec supplies only a small number of workers via umbrella arrangements, with the vast majority of our workforce engaged through other compliant PAYE methods.
Where umbrella workers are required, Scantec has long maintained strict controls over the providers we work with.
Scantec’s Longstanding Commitment to Compliance
Compliance has always been central to Scantec’s approach.
We were proud to be the first employment business in the UK to sign up to the FCSA Recruiter Accreditation scheme in 2017, ensuring that umbrella companies on our Approved Supplier List are subject to rigorous auditing and oversight.
In preparation for the April 2026 changes, we have undertaken further review of:
- Our Approved Supplier List (ASL)
- The level of due diligence completed before any umbrella engagement
- Ongoing monitoring and compliance checks
- Worker and client transparency across payment arrangements
This means our clients can continue to have confidence that umbrella engagements through Scantec are managed responsibly and with appropriate safeguards in place.
Preparing for April 2026
Over the coming weeks, Scantec will be speaking directly with affected clients to explain what the new legislation means in practice and to ensure all parties are fully prepared ahead of implementation.
We believe this reform is a positive step toward raising standards and removing risk from the supply chain.
Speak to Our Team
If you would like to understand more about Joint & Several Liability or discuss your current contingent workforce arrangements, our team will be happy to support you.
Scantec remains committed to delivering compliant, transparent recruitment solutions across the nuclear, power generation, renewables, utilities, and engineering sectors.
Please do not hesitate to get in touch.
