From 6 April 2026, the UK government is implementing major new Joint & Several Liability (JSL) rules - one of the most significant compliance changes the labour supply sector has seen in years. Introduced alongside the wider Employment Rights Act (ERA) 2025 updates, these reforms are designed to tackle tax non‑compliance across umbrella companies and recruitment supply chains.
But while the goal is clear, the impact on businesses, large and small, will be substantial.
What Is Joint & Several Liability?
Under the new JSL rules, HMRC gains the power to recover unpaid PAYE and National Insurance Contributions (NICs) from any party in the labour supply chain.
That means liability can fall on:
- The umbrella company
- The recruitment agency
- Or even the end client
This applies even if your organisation has already paid the money to the agency or payroll provider.
In simple terms: If someone in your supply chain doesn’t pay the tax due, HMRC can come after you for it.
Key Things Employers Must Know
These rules fundamentally change how risk is distributed across supply chains:
- No “reasonable excuse” defence - HMRC will not accept due diligence alone as protection. Simply checking documents is no longer enough.
- HMRC will pursue agencies first and end clients if no agency is present.
- Any organisation engaging temporary labour is in scope - including SMEs, hirers, recruitment agencies and umbrella users.
- JSL forms part of a broader crackdown on disguised remuneration schemes and unlawful payroll models.
Why JSL Matters to Your Business
This change isn’t just procedural, it’s financially significant.
- You could end up paying PAYE/NICs twice - once to the agency and again to HMRC if that agency or umbrella doesn’t remit the funds correctly.
- Supply chain visibility becomes essential - if you don’t know how your workers are being paid, you are exposed.
- Compliance is no longer optional - you must be able to prove your partners are paying tax correctly, consistently and transparently.
How to Reduce Your JSL Exposure Today
Act now, don’t wait until April 2026.
1. Audit all agencies and umbrella partners - look beyond documents, ask how they operate in practice.
2. Request evidence of PAYE and NIC remittances - a compliant partner should be able to show clear, verifiable payment trails.
3. Strengthen your contracts - include strict compliance clauses and the right to remove non‑compliant partners immediately.
4. Avoid any provider offering “enhanced take‑home pay” - if it sounds too good to be true HMRC usually agrees.
Is Your Current Agency Actually Compliant?
Many businesses assume their supplier is compliant, until they discover otherwise and with JSL, assumptions can cost you twice. Compliance is not the place to take risks.
How Titan Recruitment Solutions Supports JSL Compliance
At Titan Recruitment Solutions, we keep things simple - everything we do is fully compliant, with clear, auditable processes from start to finish. We also go beyond standard compliance checks through SafeRec.
SafeRec provides real‑time, independent audits of the umbrella companies we work with. It verifies that payroll is processed correctly, taxes are remitted to HMRC and no hidden or risky models are being used. In short, it acts as an additional layer of protection giving you transparent, automated assurance that workers are paid correctly and that your business is shielded from tax liabilities or reputational damage.
This prevents grey areas, removes shortcuts and ensures we deliver a service our clients can genuinely rely on.
If you’d like a straightforward conversation about how to protect your business and strengthen your supply chain, contact us today.