Umbrella Reforms - are we finally getting some clarity?

This is a guest blog by AP Agency Payroll

Following the latest meeting with HMRC, it finally feels like we’re making real progress. 

After years of confusion, mixed messages, and vague rules around umbrella companies, the government is starting to make concrete moves to bring some structure to the outsourced payroll space. 

It’s long overdue. 

We’ve been working closely with HMRC on the reforms for a while now - pushing for better clarity, fairer enforcement, and proper support for compliant providers, agencies, and clients. 

So, what’s the goal here? 

The proposals being discussed are starting to reflect what we’ve been asking for: 

A clearer chain of responsibility, so every party in the labour supply chain knows their role  

A focus on enforcing against those who are actively cutting corners, like those using mini-umbrella models or acquisition accounting to dodge liabilities and better support for agencies and end clients, so they’re not tripped up by unclear guidance or overly complex rules.

If you’re running a recruitment agency, engaging contractors, or outsourcing any part of your workforce, these reforms will impact you.

Joint and Several Liability - the big shift 

One of the major proposals is the introduction of Joint and Several Liability in the supply chain.That means if something goes wrong; unpaid tax, dodgy schemes, anything non-compliant - responsibility could fall on multiple parties in the chain, not just the umbrella company. It’s a bold move. But it could be the very thing that finally deters bad actors and gives the rest of us the confidence and clarity we’ve been asking for. 

What now? 

We’re not over the finish line just yet, but there’s a genuine sense that change is coming. We’ll keep doing what we always have at APL: offering fully compliant, transparent payroll solutions that protect agencies and contractors alike.  

If you’ve got questions about how the reforms might affect your business - or just want to make sure you’re working with a provider that’s fully above board, we’re always here for a chat.
 

Learn more about AP Agency Payroll