Helping End-Clients Understand What Joint and Several Liability Really Means
What’s happening in April 2026?
The UK Government is introducing new tax rules for umbrella companies – and crucially, it introduces joint and several liability for the entire supply chain. That means if an umbrella company fails to pay the correct PAYE or NICs, recruitment agencies and end-clients may also be held liable for the unpaid amount.
The graphic below, highlights in orange, just a few examples of where liability will fall under the new rules:
This applies regardless of fault, and there are no statutory excuses. HMRC can ignore offshore structures, disregard layered group companies and pursue the topmost agency or the end-client directly.
How to explain it to clients, clearly and confidently
Clients don’t need chapter and verse, they need clarity. Here’s how to position the changes:
1. This is about liability, not admin
These reforms don’t add admin, they add risk. From April 2026, if your umbrella provider gets it wrong, you could be financially responsible. Explain that even if they’re not in the payment chain, end-clients and MSPs are now in scope. Umbrella tax risk is no longer isolated – it’s shared.
2. Umbrella status doesn’t protect you anymore
The term “purported umbrella” in the legislation is deliberately broad. It covers:
- Mini-umbrellas
- Offshore schemes
- Umbrellas connected to agencies or end-clients
- Any unlawful gross pay models
If it looks like an umbrella, HMRC will treat it like one, even if it’s dressed up as something else.
3. Rebates and inflated take-home pay are red flags
Clients may not realise that high contractor take-home or large agency rebates are often funded by tax avoidance. Now, these schemes create real risk for their business.
Those incentives aren’t free, they often come from unpaid tax. And from 2026, that tax could land at your door.
4. The legislation is absolute – no defence
There’s no “we didn’t know” clause. There’s no excuse for trusting a provider that turns out to be non-compliant.
Even if you acted in good faith, you can still be liable. That’s why we’re helping our clients understand and mitigate this now.
How Brookson helps you protect your clients
As a fully FCSA-accredited umbrella company with 30 years’ compliance heritage, Brookson is working closely with recruitment companies to:
- Offer veriPAYE reporting to verify accurate payments to HMRC
- Provide documentation that demonstrates end-to-end compliance
- Support client conversations with explainer packs, webinars and one-pagers
We’re also embedded in the FCSA’s Diligence Hub and already aligned to the new joint liability standards.
Summary for you
Tip for Recruiters: Use this summary in your client emails, onboarding packs, or PSL review meetings to clearly explain the changes and demonstrate your proactive approach to compliance.
From April 2026, recruiters and end-clients will be jointly liable for any unpaid PAYE/NIC due from umbrella companies.
This means you could be held responsible — even if you didn’t make the error.
We’ve reviewed our umbrella PSL and only work with fully accredited, proven providers like Brookson to protect your business and ours.
Ready to discuss this with your clients?
The umbrella reforms are no longer a future possibility — they’re a confirmed reality with serious implications for you and your clients.
By helping clients understand the changes now, you’re not just protecting them — you’re strengthening relationships, building trust and demonstrating your value as a compliant, forward-thinking recruitment partner.
Brookson is here to support you every step of the way — from PSL audits to client packs, external payslip validation to FCSA-aligned due diligence.
Email us at: sales@brookson.co.uk or call: 0800 230 0213
Let’s build a stronger, more compliant future together.
