Draft umbrella company JSL legislation published - Joint & Several Liability rules take effect April 2026. What contractors and agencies need to know about the new compliance requirements. Learn how to create an umbrella company, its benefits, legal considerations, and tax implications.
Compare business structures and choose the best option. The government has unveiled a largely expected legislative package to impose Joint & Several Liability (JSL) on the clients of umbrella companies. In a new Finance Bill 2025-26 note yesterday, HMT says recruitment agencies will be accountable for PAYE on the payments to umbrella company employees.
Umbrella Company and IR35 Rules in the UK
The 'L Day' draft legislation has landed. The UK government introduced significant amendments to the Income Tax Act 2003 (ITEPA 2003) through the updated draft Finance Bill. These changes focus on Umbrella companies and their role in the labour supply chain, particularly concerning the proposed joint and several liability for tax compliance.
This anticipated move builds on the Joint and. Under the proposed legislation, where an umbrella company is engaged in the supply of a worker, a new concept of joint and several liability will be imposed on the umbrella company and other "relevant parties". Contractor's guide to the new umbrella company JSL legislation from April 2026.
What is an Umbrella Company & How Does It Work in 2025?
Understand the changes, plan your transition, and ensure compliance with expert advice. An umbrella company is a business often used by recruitment agencies to pay temporary workers. In most cases, the umbrella company employs you and pays your wages through PAYE.
From April 2026, HMRC is expected to bring in a new joint and several liability (JSL) rule for supply chains that use umbrella companies. If the umbrella. Wondering how IR35 applies to umbrella companies? Discover the pros, cons, and what contractors should consider when choosing an IR35 umbrella company setup.
How does an Umbrella company work? | Caunce O'Hara
An umbrella company holds legal responsibility for administering employment rights, as well as responsibility for accounting for income tax and National Insurance Contributions ("NIC") to HMRC. The use of umbrella companies increased significantly following the IR35 changes in the private sector (from April 2021).
