HMRC confirms joint and several liability: APSCo responds

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By APSCo United Kingdom July 22, 2025 2 minutes read time

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Responding to the details in the draft Finance Bill 2025-26, Tania Bowers, Global Public Policy Director for the Association of Professional Staffing Companies (APSCo), comments:

“The details published in yesterday’s Finance Bill were generally as expected. HMRC has clearly set its sights on preventing tax non-compliance, and fraud via umbrella companies are at the centre of its focus. HMRC has published draft legislation that will be introduced in April 2026 which puts the onus on recruitment firms through joint and several liability for PAYE taxes.

For recruitment firms, now is the time to prepare for the changes before they come into effect. During the consultation period, a few APSCo members expressed significant concerns around the legal implications, but there was a recognition that the legislation would create additional administrative burdens for recruiters that engage umbrella companies.

In particular, there are concerns as to the level of transparency that will be needed to protect recruitment firms. The guidance soon to be published by HMRC must outline not only its own approach, but also clear information to help staffing companies implement best practice strategies. The details published so far don’t provide recruiters with the additional tools to manage the new requirements; they simply put the responsibility on staffing firms to know the details of their umbrella supply chain, or face financial penalties.

There are some measures that will help recruiters and umbrella companies, including the specification around the transition phases for directors and the prevention of ‘Phoenixism’. However, more is needed. As APSCo has previously highlighted, licensing of the umbrella market and statutory codes of practice are needed to prevent fraud and equip those that are being tasked with tackling the issue with the appropriate resources to do so.

The digitalisation of services that has been touted as a means of helping small businesses interact with HMRC is welcome news, though the implementation of this will be no easy task. This needs to be made readily available as soon as possible in order to help staffing firms prepare ahead of the changes to legislation.

APSCo will continue to leverage its close relationship with HMRC to guide and inform members on the changes during the preparation period ahead of the April implementation.”