Big changes from April 2026 for supply chains that include umbrella companies

What’s changing?

The changes are being introduced to eliminate non-compliance and ensure the correct taxes are paid to HM Revenue & Customs while levelling the playing field between currently non-compliant and compliant supply chains.

From April 2026 the bottom line is that there will be a joint and several responsibility for the application of PAYE with the responsibility for applying PAYE moved away from the umbrella company to either the agency or the end user depending on the structure of the supply chain.  Where there is an agency between the end user and the umbrella company, the agency will be responsible for applying PAYE, but if there is no agency, the responsibility will fall on the end user.

Either way, the end user must ensure PAYE compliance, or they are at risk of liability to unpaid tax and national insurance through non-compliance in the supply chain.

Actions required:

• End users should review their supply chains to consider whether the current arrangements remain appropriate.  They should also consider whether costs will increase consequently and how best to minimise the increase.
• Agencies that use umbrella companies should consider how to implement these changes to ensure they are compliant.  They may also consider whether the current structure remains suitable following these changes.  Additionally, they should consider the impact on costs and whether this requires amendments to their pricing structure.
• Umbrella companies should consider the impact on their business and how to ensure they remain relevant to the supply chain.