20 Mar Understanding HMRC’s New Joint & Several Liability (JSL) Rules – and Why Compliance Matters

Understanding HMRC’s New Joint & Several Liability (JSL) Rules – and Why Compliance Matters

From 6 April 2026, a significant legislative change will reshape payroll risk across the recruitment landscape in the UK. This change affects agencies, end‑clients and the use of umbrella companies in paying temporary workers — particularly in sectors like construction and facilities management where flexible labour supply is common.

What Is Joint & Several Liability?

Under the updated rules, HM Revenue & Customs (HMRC) will introduce Joint & Several Liability in umbrella company supply chains. This means that if an umbrella company fails to correctly deduct and pay PAYE tax or National Insurance Contributions (NICs) to HMRC, the financial responsibility can shift up the supply chain — including to the recruitment agency or (if no agency is involved) the end client.

Crucially:

• HMRC can pursue the full amount owed from any relevant party in the chain, even if only one party caused the shortfall.
• There is no statutory excuse or “reasonable care” defence — meaning even diligent agencies can be held liable if a non‑compliant umbrella fails to pay HMRC.
• This change takes effect for payments made on or after 6 April 2026 — so employers and agencies must be ready well before the new tax year begins.

In practice, this legislation strengthens HMRC’s ability to enforce compliance and close gaps created by non‑compliant umbrellas that historically failed to remit payroll taxes — often leaving agencies and clients exposed to unexpected liabilities.

Why This Matters to Recruitment Agencies and Clients

For recruitment businesses and end clients, the introduction of JSL is a game‑changer:

• Tax and financial risk now sits with you if you use non‑compliant or poorly vetted umbrella companies.
• HMRC can pursue your business to recover unpaid taxes — even if the umbrella has already folded or gone into administration.
• This elevates the importance of robust due diligence — not just at onboarding, but ongoing compliance monitoring.

In short, JSL means that traditional checks — such as basic accreditation lists or occasional audits — may no longer be enough to protect your business from liability.

Accredited Payroll Partnerships: Our Commitment to Safety and Compliance

At Marshall Recruitment, we understand that protecting our clients and contractors is fundamental. That’s why we only work with payroll partners that are both* SafeRec and Lighthouse accredited*.

What Does This Mean?

• SafeRec accreditation provides a robust, real‑time compliance framework that regularly verifies tax treatment, RTI submissions and PAYE/NICs remittance — giving proof‑based assurance, not just paperwork.
• Lighthouse accreditation further signals that our payroll partners meet high industry standards for governance, financial stability and HMRC compliance.

By working exclusively with providers accredited by both systems, we minimise the risk of non‑compliance and reduce exposure to JSL — because:

✔ Continuous reporting and transparency help demonstrate compliant tax and NIC payments.
✔ Accredited payroll partners are routinely monitored, giving you confidence in ongoing compliance.
✔ You won’t be exposed to unexpected HMRC liabilities arising from payroll failures.

What This Means for Our Clients and Contractors

For companies in Cambridgeshire and Suffolk seeking reliable recruitment in construction and facilities management, this approach ensures:

• Greater peace of mind that payroll obligations are met accurately and on time.
• Reduced financial and reputational risk under the new JSL regime.
• A trusted recruitment partnership backed by robust compliance credentials.

With JSL coming into effect from 6 April 2026, now is the time to ensure your payroll arrangements are future‑proofed and protected. At Marshall Recruitment, we’re committed to helping you navigate these changes safely — by partnering only with payroll providers that meet the highest standards of compliance and accreditation.