Joint and Several Liability (JSL) for umbrella companies, due to take effect in April 2026, will not replace HMRC’s list of named tax avoidance schemes. Instead, it will operate alongside it.
JSL Rules
The JSL rules will make clients jointly liable where an umbrella company fails to pay PAYE or NICs to HMRC. This measure extends liability beyond the umbrella, allowing HMRC to recover missing tax from other parties in the supply chain, such as agencies or end-clients.
Currently, HMRC primarily holds the umbrella company responsible for unpaid liabilities. However, many umbrellas dissolve or “phoenix” before debts can be collected, limiting HMRC’s recovery options. By shifting responsibility to clients, JSL introduces direct financial risk for those engaging non-compliant umbrellas.
HMRCs Watchlist
Since April 2010, HMRC has published a watchlist, naming tax avoidance schemes and their promoters to deter engagement. This list will continue to operate after JSL’s introduction, serving as a public record of schemes under investigation or sanction.
From April 2026, employment businesses and, in some cases, end-hirers will share liability with umbrellas for PAYE taxes. The change is intended to drive stronger due diligence and reduce the use of disguised remuneration schemes posing as compliant umbrella models.
Five new companies were recently added to HMRC’s list:
- AIT Umbrella Ltd
- PAY APL Ltd
- Real Payments Ltd
- Regis Ltd
- Endeavour Services Ltd
Most listed schemes are associated with disguised remuneration, marketed as umbrella arrangements.
HMRC advises that absence from the list does not imply approval. Businesses are urged to conduct thorough due diligence across their supply chains to ensure all tax obligations are met.
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