From 6 April 2026, significant changes to PAYE responsibilities will come into effect for labour supply chains, that include umbrella companies. If you are an agency or end client, the rules mean that you are responsible for making sure PAYE is operated correctly when an umbrella company employs your workers. If we find an umbrella company has not paid the correct amount of PAYE to us, we may recover it from you.  

To help you prepare, we have published guidance on these changes to umbrella company rules and updated the Employment Status Manual. This provides details on how the changes will tackle non-compliance in the umbrella company market, and what this means for businesses.  

Early preparation is essential; get ready ahead of April 2026 by:  

• reviewing the guidance and your labour supply chains 

• conducting your own due diligence on any umbrella companies you work with, including reducing your risk of using an umbrella company who operates a tax avoidance scheme  

• registering for one of HMRC’s webinars on labour supply chains featuring umbrella companies — these in-depth sessions are designed to support implementation requirements for agencies and other parties in labour supply chains  

December 2025 issue of the Employer Bulletin – GOV.UK