Since April 2026 is fast approaching, we continue to tackle questions arising from the draft tax legislation that shifts accountability for an umbrella companies’ tax liability to agencies and, in some cases, clients. This time we answer: ‘What’s the difference between JSL and debt transfer, and why does it matter?’

Put simply, joint and several liability allows HMRC to collect unpaid taxes from several businesses because they are all responsible for the same debt. Whereas debt transfer enables HMRC to assign the tax debt to another business in the supply chain.

However, before we explain the significance of these two tax recovery tools, it’s helpful to understand their origins.