The report reiterated the Government’s directive to crack down on tax avoidance and to prevent non-compliance. To this end, HMRC has released draft legislation, due to take effect April 2026, that will hold recruitment agencies that use Umbrella companies accountable for PAYE on workers’ pay.

The intent of the legislation is targeted at preventing non-compliant Umbrella companies from being used in fraud and tax avoidance. As a compliant Umbrella company, this is welcomed. HMRC will work with stakeholders, including recruitment agencies and Umbrella companies over the coming months to ensure they are ready for the changes in April 2026.

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