Surprisingly umbrella company reform made it into the Budget speech. However the initial optimism soon gave way to shock. In the policy paper 'Tackling non-compliance in the umbrella company market’ the government announced that the responsibility for PAYE where an umbrella company is used in the labour supply chain would change. From April 2026 the responsibility to account for PAYE will shift to the recruitment company. If there is no recruitment company in the chain the responsibility will sit with the end client.
This doesn’t mean that agencies and clients cannot use an umbrella – in fact it is promoting the use of compliant umbrellas – but the third parties will be responsible for any shortfall. This would effectively be a transfer of the debt because if the umbrella doesn’t pay the correct amount the other third party will be liable.
This measure was...
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Home >Articles > Autumn Budget 2024: umbrella companies - sledgehammer to crack a nut?
Autumn Budget 2024: umbrella companies - sledgehammer to crack a nut?
Surprisingly umbrella company reform made it into the Budget speech. However the initial optimism soon gave way to shock. In the policy paper 'Tackling non-compliance in the umbrella company market’ the government announced that the responsibility for PAYE where an umbrella company is used in the labour supply chain would change. From April 2026 the responsibility to account for PAYE will shift to the recruitment company. If there is no recruitment company in the chain the responsibility will sit with the end client.
This doesn’t mean that agencies and clients cannot use an umbrella – in fact it is promoting the use of compliant umbrellas – but the third parties will be responsible for any shortfall. This would effectively be a transfer of the debt because if the umbrella doesn’t pay the correct amount the other third party will be liable.
This measure was...
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