The Finance Bill 2025-26 was published on 4 December 2025, and has started its passage through the Parliamentary process. Most notably, and as expected, it included the new Chapter 11, Part 2 of ITEPA 2003 designed to drive behavioural change amongst businesses that use umbrella companies.
Aside from some tweaks to the purported umbrella companies section, there were no material changes to the joint and several liability (“JSL”) provisions published in July 2025, and we expect the Finance Bill to take a streamlined route through Parliament and receive Royal Assent without contention. As a recap, JSL allows HMRC to pursue PAYE and NI liability from the umbrella company and the agency holding the contract with the end client for the supply of the worker (ie the top tier agency, or Managed Service Provider). If there is no agency in the supply chain, the liability will fall on the end client.
This is a strict liability offence meaning there’s no statutory defence for an agency that acted reasonably or conducted due diligence before engaging an umbrella company. It will apply to all payments made on or after 6 April 2026.
Next steps
Since we, nor other commentators, expect further changes to be made to the JSL provisions prior to Royal Assent, we strongly recommend that agencies take action now to review and reduce their PSLs to only the most financially stable, vetted, and those with a proven track record of robust compliance operations. You should also ensure you have strong processes in place to ensure only PSL approved umbrella companies pay your agency workers.
Why PayStream?
Our 6-point compliance plan has been widely circulated and is intended to reassure our agency partners that we are compliant:
-
FCSA accreditation
-
Payroll audit conducted by a Big 4 accounting firm
-
Contractual indemnity
-
Financial strength
-
Monthly evidence packs
-
SafeRec accreditation for real-time payslip auditing
With all that we have to offer, a strong financial position and industry-leading compliance procedures, why partner with anyone else?
And remember, we’re here to make this process as easy as possible for you. If you have any questions or need a helping hand, don’t hesitate to reach out to your Key Account Director.
