As part of the December 2025 Employer Bulletin, information on Labour supply change responsibilities have been issued:
From 6th April 2026, significant changes to PAYE responsibilities will come into effect for labour supply chains, that include umbrella companies.
An agency or end client are responsible for making sure PAYE is operated correctly when an umbrella company employs their workers.
If HMRC find an umbrella company has not paid the correct amount of PAYE, HMRC may recover it from the agent or end client.
To help prepare, HMRC have published guidance on these changes to umbrella company rules and updated the Employment Status Manual. This provides details on how the changes will tackle non-compliance in the umbrella company market, and what this means for businesses.
Early preparation is essential; get ready ahead of April 2026 by:
- reviewing the guidance and labour supply chains
- conducting due diligence on any umbrella companies used, including reducing your risk of using an umbrella company who operates a tax avoidance scheme
- registering for one of HMRC’s webinars on labour supply chains featuring umbrella companies — these in-depth sessions are designed to support implementation requirements for agencies and other parties in labour supply chains
PAYadvice.UK 11/12/2025