Policy paper

PAYE changes for the umbrella company market

This measure introduces legislation to tackle non-compliance in labour supply chains which includes an umbrella company, or any third person supplying labour.

• From: HM Revenue & Customs
• Published: 26 November 2025

Documents

Umbrella company market — changes to Income Tax rules to tackle non-compliance

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Details

An umbrella company employs workers on behalf of agencies and the businesses the workers do the work for (the end client). This measure makes recruitment agencies or end clients accountable for Pay as You Earn (PAYE) on payments to workers supplied through umbrella companies.

If the labour supply chain has:

• more than one agency, the rules apply to the agency that has the direct contract with the end client to supply the worker
• no agency, the rules apply to the end client

This measure will have effect from 6 April 2026.

Published 26 November 2025