JSL readiness checklist

Joint & several liability acknowledged

Director or board sign-off that the agency supplying workers to the end client understands it will be jointly and severally liable for PAYE and Class 1 NIC shortfalls where an umbrella company sits in the labour supply chain. HMRC may pursue the agency in the first instance. Effective 6 April 2026 (Finance Bill 2025–26, new ITEPA 2003 Part 2 Chapter 11).

Ref: GOV.UK — Umbrella companies tackling non-compliance (July 2025 policy paper)

Preferred Supplier List maintained

Every umbrella on the PSL is recorded with approval date, review owner, and re-certification schedule. The agency that contracts with the end client controls which umbrellas enter the supply chain — the government's chosen reform lever.

Ref: GOV.UK — Tackling tax non-compliance: umbrella company market (Oct 2024)

Umbrella legitimacy verified before PSL admission

Companies House registration, director information, HMRC PAYE scheme status, and a named accountable contact collected and on file before an umbrella is approved. Consultation respondents cited these as core due-diligence checks even though mandatory DD was not legislated.

Ref: GOV.UK — Consultation outcome (Mar 2025), Q12–Q13

Supplier assurance pack collected

Insurance certificates, accounts filing status, contracts and payroll policies reviewed before PSL admission. Evidence retained (consultation: typically six years). Accreditation from FCSA or Professional Passport may supplement but not replace own checks.

Ref: GOV.UK — Consultation outcome (Mar 2025), Q14

Payslip sample audit vs RTI

Sample payslips from each PSL umbrella reviewed on a fixed cadence and checked against RTI submissions. Anomalies logged with remediation owner and deadline. HMRC's umbrella pay tool can help estimate gross/net pay for a role.

Ref: GOV.UK — Work out pay from an umbrella company (HMRC, Dec 2024)

Off-PSL worker routing blocked

Placement and payroll processes prevent workers being paid via non-PSL umbrellas without documented exception approval. Outsourcing payroll to an umbrella does not outsource the underlying PAYE obligation — the agency remains liable for any shortfall.

Ref: GOV.UK — Tackling tax non-compliance: umbrella company market (Oct 2024), §3

Worker engagement notice issued

Umbrella workers received plain-English notice of how they are engaged, who operates PAYE from April 2026, and how to raise payslip concerns. Agency workers retain day-one rights (AWR equal treatment) and 12-week equal-pay protections where applicable.

Ref: GOV.UK — Your rights as an agency worker

PSL change decision log

Every add, remove, or suspend decision on the PSL recorded with rationale, linked evidence (due-diligence pack, payslip audit, accreditation), and named approver — retrievable for HMRC or internal audit.

Non-compliance response plan

Defined steps when an umbrella fails audit or RTI reconciliation: suspend new placements, migrate affected workers, preserve evidence, and escalate to HMRC where appropriate. ~700k workers use umbrellas; ~275k+ were with non-compliant operators in 2022–23.

Ref: GOV.UK — Autumn Budget 2024 policy paper; consultation executive summary

Quarterly JSL exposure review

Scheduled board-level review of PAYE exposure across the PSL, open findings, payslip flags, and supply-chain changes since last quarter. Government expects agencies continuing to use umbrellas to increase assurance activity ahead of April 2026.

Ref: GOV.UK — Umbrella companies tackling non-compliance (July 2025), monitoring section