April Ready: how Liquid Friday protects recruitment businesses from JSL risk

This is a guest blog by REC business partner, Liquid Friday

With joint and several liability coming into effect on 6th April, REC members need clarity on how to protect their businesses and ensure compliance across their supply chains.

The time for preparation has passed - what agencies need to know now is exactly how their umbrella suppliers will help them mitigate risk.

To help members understand and respond to these changes, Lewis Gosling, Head of Technical Operations at Liquid Friday, explains how the company supports agencies in managing JSL risk and safeguarding their businesses.

1. What due diligence measures will you be able to demonstrate to protect members from joint and several liability?

Protection from joint and several liability starts with a checklist of due diligence fundamentals. Liquid Friday is a UK-registered company with no offshore affiliations, transparent ownership, and independent oversight through our FCSA accreditation and SafeRec certification.

At onboarding, agencies receive a full compliance pack including the Key Information Document (KID), engagement structure, deduction calculations, insurance details, and company information. Throughout the engagement, agencies can access payslip and RTI data via our Stride platform or verify it independently through SafeRec, providing clear evidence that the correct tax is being calculated and paid.

2. What further reassurances will you have in place – e.g. independent audits?

Further reassurance for REC members comes from independent auditing and ongoing verification. Behind FCSA accreditation lies rigorous annual independent audits by specialist tax, legal and accounting professionals to confirm compliance with the FCSA Codes.

Alongside this, our certification with SafeRec provides real-time auditing of payslips. Payroll data is cross-checked against RTI submissions to make sure deductions and tax payments are correct. Agencies also receive regular audit reports, giving them ongoing, independent evidence that payroll is being handled compliantly throughout the engagement.

3. How will you ensure that there is full transparency – demonstrating agency workers’ remuneration will be treated fully as employment income?

Umbrella pay calculations have traditionally been quite opaque, with agencies often seeing little more than a gross rate and a take-home figure.

This is where our Stride platform really comes into its own. Agencies can use the same calculator our team uses in-house, generating a detailed pay illustration in seconds that clearly shows how the worker’s remuneration is treated fully as employment income. Each calculation breaks down the charge‑out rate into employer costs, employment taxes, other deductions, and net pay.

But the proof is in the actual, real-time data. Agencies can also view or request payslips and RTI submissions, either directly from Liquid Friday or independently through SafeRec, giving complete confidence that liabilities are being calculated, deducted, and reported correctly.

4. How will you demonstrate that payments for PAYE and NI are made accurately to HMRC on an ongoing basis?

The way we see it, it’s actually quite simple to demonstrate that PAYE and NI are being paid accurately to HMRC, and we advise members that they should expect full access. If an umbrella provider makes this difficult, that’s a red flag about what might be hidden.

With Liquid Friday, agencies can access RTI submissions directly though our Stride platform for any worker, giving real‑time evidence of tax and NI reporting. Alternatively, because we’re part of the SafeRec ecosystem, every payslip is audited at source and cross‑checked with HMRC data, with transparent reports available to agencies,  proving liabilities are declared and paid as required.

5. Financial stability – this has been identified as a key concern for members. How will you demonstrate your ongoing ability to meet your financial commitments?

We understand that financial stability is a real concern for members when choosing the umbrellas they work with. At Liquid Friday, our accounts are independently audited to the highest scrutiny, and to maintain our FCSA accreditation we meet strict financial liquidity requirements. We protect cashflow across the Liquid Friday Group with comprehensive credit insurance, and all RTI submissions - historical and real-time - are available for review, either via Stride or SafeRec, as mentioned previously.

We’re consistently highly ranked in the Solent 250 among the top financially performing companies in our region. We’re careful only to take on business that’s commercially viable,  ensuring our margin-to-turnover ratios keep us financially secure. Most importantly, we’ve been operating for 20 years,  going through annual accounting and audit cycles throughout that time - we’re literally the furthest thing from a phoenix or fly-by-night operation. All of this gives
agencies independent reassurance that we can meet our ongoing commitments.

Final thought

Ultimately, JSL comes into play when the umbrella company in the supply chain fails to pay what it should. That means the single most effective way to reduce risk is to ensure the umbrellas you are working with are calculating, deducting and paying the correct liabilities to HMRC every time.

In practice, that means looking beyond headline assurances and asking for real visibility. That means transparent pay calculations, access to payslip and RTI data and independent verification. They must also have mechanisms in place to transparently share this information with you.

For recruitment businesses, protection now comes down to choosing partners who can evidence compliance, not just promise it. 

For more insight, watch our JSL webinar on demand: https://www.liquidfriday.co.uk/missed-our-jsl-webinar-watch-now-on-demand

Learn more about Liquid Friday