HMRC has issued an update to the umbrella legislation guidance set to take effect in April 2026: https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm2420. The guidance issued has will be effective from 6 April 2026 and is stated as being subject to revision.
Responding to this development, Crawford Temple, CEO of Professional Passport, believes the guidance confirms his position on the issue namely that, in effect, agencies will carry liabilities they cannot control.
“The manual makes it clear that if an umbrella fails to meet its PAYE obligations, HMRC will pursue recovery from the relevant parties in the chain – recruiters included,” he said. “Moreover, the fact that HMRC has published guidance this far in advance suggests the draft legislation will pass into statute largely untouched. It’s unusual to see guidance precede the final legislation.”
Temple also believes the guidance validates the warnings he has been raising, that monthly checks and so-called ‘guarantees’ do not remove the exposure. “The only way for agencies to eliminate risk is to take direct responsibility for PAYE payments,” he said. “As HMRC has said today: “It does not matter which party pays or how much each party pays as long as the amount is paid in full”.”
Responding to the guidance from HMRC, Rebecca Seeley Harris of Re:Legal Consulting said: ”I’m pleased to see that HMRC has provided guidance at this time when it is much needed. It also signals that the Government is intent on pushing ahead with JSL as it has been published in the draft, although the guidance does state that it may be subject to revisions.”
