From April 2026, a major change in tax law means companies can no longer "outsource" their tax risk to umbrella companies. If an umbrella provider fails to pay the correct PAYE or National Insurance, HMRC can now pursue the end client or agency for the debt.
What’s at stake: Liability for unpaid Income Tax, NICs, and student loans.
Who is affected: Any business using umbrella companies or third-party labour providers.
IR35: Stays separate, but only if applied correctly.
Action: Review your supply chain due diligence. HMRC has released a webinar and guidance to help businesses manage this new financial risk.
Useful resources:
PAYE rules for labour supply chains that include umbrella companies from 6 April 2026
Check how to reduce your risk of using an umbrella company who operates a tax avoidance scheme