SafeRec: Why Automation and Compliance Will Define Agency Resilience in 2026

Why Automation and Compliance Will Define Agency Resilience in 2026 

As Joint and Several Liability legislation comes into force in April 2026, recruitment agencies are entering one of the most defining periods in their history. In just six months, accountability for tax and payroll accuracy will extend across the entire supply chain, from umbrella companies through to the agencies themselves. 

A New Era of Accountability 

Once implemented, the legislation will mean that if the umbrella company fails to meet its tax obligations, HMRC will be able to recover those liabilities from other parties, including the recruitment agency. 

Crucially, there will be no statutory excuse. Even agencies that have carried out audits, updated contracts, and acted in good faith could still be held financially responsible if a supplier fails to pay what is owed. 

This marks a fundamental shift in how compliance must be approached. Annual audits and supplier questionnaires will no longer provide sufficient protection. Agencies will need continuous, data-driven audits across every link of their supply chain to ensure that liabilities have been paid and that risk is being actively managed, not assumed away. 

From Reactive Checks to Continuous Audits 

Historically, many agencies have relied on manual compliance reviews, an approach that is too slow and limited to meet the upcoming standards. The future will require systems that provide real-time auditing, drawing data directly from payroll processes and HMRC records. 

The goal is not just to demonstrate compliance to regulators, but to protect the agency itself. In a world where accountability travels up the chain, agencies must be able to prove, at any point, that they have full audit oversight of how their suppliers are operating. 

Automation as the Backbone of Modern Auditing 

Manual oversight simply cannot keep pace with the speed and volume of data required under Joint and Several Liability. Automation is becoming the foundation of effective auditing, not to replace professionals but to empower them. 

Automated systems can audit every payslip, check every submission, and flag discrepancies as they occur. This transforms compliance from a periodic exercise into an ongoing process that is faster, more consistent, and more reliable. 

Automation also frees compliance teams to focus on higher-value work: interpreting audit data, addressing anomalies, and supporting suppliers in maintaining standards, rather than chasing paperwork or performing repetitive checks. 

Building Resilience Through Transparency 

For agencies, the coming months represent a critical opportunity to strengthen operational resilience. The organisations that treat compliance as a strategic function, built on automation, accurate data, and independent auditing, will be best placed to withstand both regulatory scrutiny and commercial pressure. 

SafeRec Certified Umbrella Companies are already providing this level of independent, automated auditing to agencies today, giving them real-time assurance that payroll and tax obligations are being met throughout their supply chain. 

This is not about adding bureaucracy; it is about creating transparency. Continuous auditing enables agencies to make decisions confidently, work with trusted partners, and demonstrate integrity to clients and contractors alike. 

Sam Amos 

Sales Director- SafeRec