As announced at Autumn Budget 2024, the Government has published draft legislation to tackle non-compliance in the umbrella company market.

The measures contained within the Finance Bill 2026 are an initial step towards regulating what the Government saw as a troublesome part of the temporary labour market. It follows extensive and drawn-out consultation by HMRC with the many stakeholders who make up this dynamic employment sector.

Recruitment agencies, end clients, umbrella companies and contractors will all be affected; but ultimately, this is aimed at driving down non-compliance to protect such parties. Those that work with compliant umbrella companies will be unaffected.

What are the implications of the proposed framework?