Compliance is no longer a unique selling point. It is the baseline expectation. With the draft legislation published on 21 July 2025 as part of the Finance Bill 2025–26, the government is set to introduce Chapter 11 into Part 2 of ITEPA 2003, a major development in labour supply chain accountability. Under these new rules, which take effect from 6 April 2026, recruitment agencies (or end clients where no agency is involved) will become jointly and severally liable (JSL) for any unpaid PAYE, and eventually National Insurance contributions, owed by umbrella companies. This shift marks a clear move by HMRC to close compliance gaps and place accountability squarely across the chain.
In the context of the umbrella market the government’s policy paper states that, while many umbrellas operate properly, too many are used to facilitate non‑compliance. HMRC estimated that over £500 million was lost to disguised remuneration tax‑avoidance schemes in 2022‑23, almost all of which was facilitated by non‑compliant umbrella companies. This has had a damaging impact on the reputation of the wider industry, prompting many umbrella and payroll companies to emphasise their compliance credentials in an effort to rebuild trust with the contingent workforce.
Because the message is clear: this change isn’t just about good practice. It’s about protecting businesses from risk, protecting workers from unexpected tax bills, and protecting reputations across the supply chain.
If Everyone Says They Are Compliant, What Next?
For umbrella, payroll and recruitment companies, the answer goes beyond ticking boxes. It lies in transparency, integrity and the value delivered to both clients and the workforce. Saying “we meet the rules” is no longer enough. Businesses need to be able to say:
- We understand our entire supply chain and hold every partner to the same standards.
- We deliver more than compliance. We offer engagement, support and real value.
- WWe are a trusted partner, not just a service provider.
The Supply Chain Responsibility
Under the new legislation, liability sits with the agency holding the direct contract or, where no agency is involved, with the end client. That makes clear due diligence across the entire supply chain is no longer optional.
Umbrella companies, payroll providers, benefits platforms and technology partners all need to be properly assessed and managed. Compliance can no longer be treated as a static exercise. It must be built into operations, monitored continuously and clearly evidenced.
How Thrivr Anchors Value and Trust
At Thrivr, we are FCA regulated. This sets us apart from most other employee benefits providers and allows us to deliver regulated financial services directly through our platform, without relying solely on third party referrals. It also reflects our wider commitment to transparency, oversight and trust.
We work only with partners who meet our compliance standards and who understand the realities of supporting temporary, contract and permanent staff. Every part of our offer – from perks and financial tools to wellbeing support – is built on a foundation of regulatory integrity and deep sector experience.
For our clients, this means you can confidently position your proposition to agencies, end clients or workers as one that delivers more than compliance. It delivers meaningful value.
Our approach helps shift compliance from a cost to a competitive advantage. Instead of saying we are compliant, you can say we are trusted, we are transparent, and we deliver value.
The Time to Act Is Now
With the legislation coming into effect on 6 April 2026, now is the time to take stock. Reviewing your supply chain, partner relationships and workforce proposition is a critical step in preparing for what’s ahead.
At Thrivr, we see compliance not just as a requirement but as the foundation of a more credible, resilient and forward-thinking offer to clients and contractors. We are here to help you build a proposition that is not only compliant, but built to last.
Want to explore how Thrivr can support your business with a trusted, value driven contingent workforce solution?
Contact us at hello@thrivr.co.uk for a demo or conversation today.
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