Policy paper

Umbrella Companies: tackling non-compliance in the umbrella company market

This measure introduces draft legislation to make recruitment agencies or end clients accountable for Pay As You Earn (PAYE) on payments to workers supplied through umbrella companies.

• From: HM Revenue & Customs
• Published: 21 July 2025

Documents

Umbrella companies — tackling non-compliance in the umbrella company market

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Draft legislation

PDF, 216 KB, 5 pages

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Draft legislation (accessible version)

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Explanatory note

ODT, 13.1 KB

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Details

This measure makes recruitment agencies accountable for 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 21 July 2025