On Monday 15 September, we’ll be sponsoring the second instalment of ‘The Future of Umbrella: Legislation, Liability & Leadership’, hosted by CMR. The event will bring together industry stakeholders to explore the latest developments in umbrella regulation, what’s changing, what’s still unclear and what it means for agencies, providers and end clients.
This discussion comes at a pivotal time for the industry. On 21 July 2025, HMRC released draft legislation introducing a new liability framework for labour supply chains involving umbrella companies, outlining significant changes that will affect the structure and responsibilities within labour supply chains from April 2026.
What the Draft Legislation Proposes
Under the proposed rules, recruitment agencies and in some cases end clients, will be held jointly and severally liable (JSL) for unpaid PAYE tax, and, in future updates, National Insurance contributions (NICs).
Specifically:
- If the supply chain includes multiple agencies, liability will sit with the agency that holds the direct contract with the end client
- If there is no agency involved, the end client will assume responsibility
- These rules are expected to take effect from 6 April 2026
This move is part of HMRC’s wider effort to tackle tax non-compliance in the umbrella market and to close an estimated £2.85 billion tax gap by 2029.
The legislation also introduces a statutory definition of an umbrella company and emphasises the importance of stronger due diligence throughout the supply chain.
As the FCSA stated in response to the draft bill:
“Chapter 11 creates a watertight JSL framework. While recruiters aren’t being deemed the employer, the policy paper’s focus on due diligence highlights the importance of tools like Diligence Hub.”
A Sector-Wide Shift
Speakers at “The Future of Umbrella” event will include representatives from SafeRec, the FCSA team, and Azuki, who will explore the implications for compliance, risk management and supply chain integrity.
While Thrivr is not an umbrella company, we work closely with the umbrella, payroll and recruitment sector to help providers deliver greater value to their flexible workforces. Our platform enables organisations to offer perks, wellbeing support and regulated financial products, helping improve the contractor experience across the board.
Why We’re Attending
As the supply chain is scrutinised more closely, the expectations of both regulators and workers will continue to rise.
We’re attending this event to stay informed, engage with our clients and contribute to conversations about how the industry can evolve responsibly, not only through regulatory change but also through better support, transparency and worker experience.
If you’re attending the event, we look forward to seeing you there. If you would like to learn more about how we support the sector, get in touch at hello@thrivr.co.uk.
