From April 2026, big changes are coming to HMRC's Joint and Several Liability (JSL) rules that will fundamentally change how responsibility for tax compliance is shared across the contingent labor supply chain.
If you engage contractors via agencies or umbrella companies, your organisation could be exposed to tax risk that previously sat elsewhere. To help you make sense of the risk, Joao Martires, YunoJuno COO teamed up with Sebastian Sauca, CEO at SafeRec and Rhys Thomas, Managing Director at WTT for a practical webinar session to help equip you for the changes.
The session generated dozens of questions from attendees navigating these complex changes - from understanding strict liability and related parties, to determining who's responsible when things go wrong. We've compiled the most pressing questions below, with expert answers from our panel to help you understand what these reforms mean for your business and how to prepare.
Umbrella Reform Webinar FAQ: What You Asked
Q: In simple terms, what is Strict Liability and Joint and Several Liability?
A: Strict Liability means you are immediately liable based on your position or involvement, without requiring proof of fault.
A: Joint and Several Liability means multiple parties can each be held 100% responsible for the same debt or obligation, meaning HMRC can pursue any or all of them for the full amount.
Q: We are an end client and we are already conducting due diligence on our entire supply chain. Will it be enough to protect our business?
A: Due diligence now extends into confirmation. In the past, due diligence has been enough to mitigate against potential risk, linked with indemnity provisions, contracts and flow-down indemnities throughout the supply chain. However, now, simple due diligence that's happened previously, is no longer enough. Confirmation that tax has been paid correctly, every month, across 100% of your contingent workforce, is now the critical point.
Q: What about if we are already using an FMS - are we protected or do we need to do more?
A: Working through a compliant FMS like YunoJuno can ensure that Joint and Several liability (JSL) in this setting does not affect your organisation where YunoJuno are the “relevant party” from a JSL perspective. In addition, YunoJuno ensures supply-chain compliance, decreasing the extent of the requirement for your organisation. YunoJuno also ensures that tax and NI is correctly deducted and paid to HMRC adding multiple layers of protection through certification, confirmation, monitoring, and insurance. As an end client you are shielded from JSL because the FMS sits as the "relevant party" that contracts directly with you.
Q: In getting prepared for these changes, what is the one area or best practice that often gets overlooked?
A: Many companies focus on vetting umbrella providers upfront which is important, but fail to establish ongoing monitoring, comprehensive record-keeping and confirmation that the right amount of tax has been calculated and then paid to HMRC. If you are required to challenge a determination issued under JSL, you'll need to demonstrate exactly this:
- Which workers were engaged through which umbrellas
- What payments were made and when
- What compliance checks were performed
- Evidence all required taxes and NI was actually paid to HMRC
This is where a centralised FMS can help by providing real-time visibility, enforcing compliance checks, and automatically creating the audit trail you'll need for any tax inquiry. Remember this is a strict liability so due diligence is not a defence. The only defence is showing that tax and NI was actually paid to HMRC.
Q: Could you please define ‘employed’? Is a freelancer ‘employed’ within the meaning of this regulation and to be subsumed accordingly?
A: Under the umbrella reform and JSL rules (Chapter 11, 61Y) applies where a worker provides services to a company, that the worker is employed by the umbrella company and that the umbrella conditions are met.
The umbrella company conditions are that;
1) There is a contract between the umbrella company and the client or another entity
2) That under that contract services are provided or that the umbrella company is paid for the services.
For Chapter 11 the worker must be employed (specifically excluding deemed employment) meaning there must be;
1) An employment contract with the umbrella company
2) Payslips showing PAYE tax and NI deductions
3) Payment through the umbrella's PAYE.
Freelancers working as genuinely self-employed contractors (e.g., sole traders or through their own limited companies) are not caught by these JSL regulations. The rules only apply when there's an umbrella company acting as the employer in the supply chain.
Q: If we use YunoJuno for all our contract engagements with the associated checks and verification, what further work would we need to do as an end client on the tax risk?
A: When you use YunoJuno for all your contractor engagements, the platform handles the heavy lifting on tax risk mitigation including:
- Performing worker classification and compliance checks automatically
- Only working with SafeRec certified umbrellas (independently audited in real time on every single payslips they process and verified monthly for tax payments)
- Restricting JSL from being applicable to your organisation by sitting as the "relevant party" in the supply chain
- Providing comprehensive indemnity coverage and insurance protection
- Maintaining complete audit trails and documentation
What you should do as best practice:
- Ensure all contractor engagements flow through the YunoJuno platform (not around it)
- Periodically review your contractor spend and engagement data via YunoJuno's reporting
- Keep contracts and internal policies updated to reference your use of compliant platforms
Didn’t catch the webinar? Playback now
Download our webinar to understand:
- Who is liable at each point in the contingent labor supply chain
- How different operating and contractual models change exposure
- Real-world scenarios organizations are likely to face post April 2026
- Practical mitigation strategies, including compliance verification and insurance options
If you work with contractors in any capacity, you'll want to get ahead of this now - and these Q&As along with our webinar is a strong place to start.
This blog and webinar is provided for informational purposes only and does not constitute legal, tax or any other professional advice. For advice specific to your circumstances, please consult a qualified legal professional.
