UmbrellaSure, the insurance provider and sub-brand of Qdos, has welcomed the publication of draft legislation for tax reforms impacting the umbrella sector and recruitment industry. They claim the legislation will start to lift the “cloud of uncertainty” hanging over the sector.
From 6th April 2026, recruitment agencies/end-clients will become liable for tax not paid by umbrella companies. The move is designed to prevent tax avoidance in the sector and protect hundreds of thousands of flexible workers in the process.
Should this draft legislation become law, this transfer of the tax liability, will see agencies – or end-clients where no agency exists in the relationship – carry ‘joint and several liability’. This has been met with relief, following speculation that recruiters/end-clients may be made responsible for making tax deductions from the umbrella workers.
“A dark cloud of uncertainty that has been hanging over the sector is starting to lift with this news,” commented Sam Cox, UmbrellaSure Director. “While this is only draft legislation, it offers reassurance to both umbrella companies and recruitment agencies – and is certainly the lesser of two evils. The industry can start to focus on how it prepares for and manages these changes before they’re rolled out next April.”
Rebecca Seeley Harris, of Re Legal Consulting, added: “This has been a long time coming. I am pleased that the government has listened to industry feedback. Along with the consultation on umbrella company regulation in the Autumn, joint and several liability should provide the certainty that is needed in the supply chain for better compliance.”
