Picking the wrong umbrella now carries real financial risk. From April 2026, JSL makes agencies liable for unpaid PAYE. If an umbrella fails to pay HMRC, agencies now share that risk. Umbrella choice is no longer just a supplier decision. It is a legal one.
Why does umbrella choice now carry legal risk?
From 6 April 2026, JSL rules make agencies jointly liable for unpaid PAYE. If your umbrella does not pay HMRC, your agency picks up the bill. Choosing the wrong umbrella is no longer just a reputational issue. It is a direct financial and legal liability.
Before April 2026, agencies mainly faced reputational damage from non-compliant umbrellas. That was bad enough. Now HMRC can pursue agencies directly. It can recover the tax the umbrella failed to pay. You do not have to take part in the non-compliance. You only have to have used that umbrella.
It works like this. Your umbrella collects PAYE from contractors. If it keeps the money instead of sending it to HMRC, HMRC can recover it from you. The liability is joint. That means HMRC does not need to exhaust the umbrella’s assets first. It can come straight to your agency.
Read our full JSL guide for agencies to see how the rules work.
Why does FCSA accreditation matter for agencies after JSL?
The FCSA (Freelancer and Contractor Services Association) audits umbrella companies against strict compliance standards. FCSA-accredited umbrellas run genuine PAYE, pay HMRC correctly, and do not use tax-avoidance schemes. For agencies managing JSL risk, choosing an FCSA-accredited umbrella is one of the strongest checks you can make.
FCSA membership is not self-declared. Umbrellas go through a structured audit process. Auditors check payroll accuracy, HMRC payment records, and contract terms. They also check how deductions are explained to contractors. Umbrellas that fail lose accreditation.
For your agency, that means an independent, documented check has already taken place. If HMRC looks into your supply chain, FCSA accreditation shows you acted responsibly. That matters when joint liability is in play.
See how to check umbrella compliance.
Why does Professional Passport accreditation matter?
Professional Passport is a separate independent accreditation body. It audits PAYE operations, worker rights, contract terms, and payroll practices. The audit is separate from FCSA and independent of it. An umbrella with Professional Passport approval has passed a second compliance check.
The two bodies do not share audit results. Passing one does not mean you pass the other. Holding both means clearing two separate compliance barriers. Two different auditors have checked the same thing. That is a stronger position than holding just one.
Professional Passport also looks at fair treatment of workers. That matters to agencies too. Workers who are paid correctly and treated fairly are less likely to come back with complaints.
What does SafeRec certification add that the others do not?
SafeRec audits each payslip as it is generated, not once a year. It cross-checks every payslip against the RTI data the umbrella filed with HMRC. SafeRec also checks the umbrella’s HMRC tax account every month. That confirms the PAYE was not just reported, but actually paid.
This is the gap that matters under JSL. An annual audit tells you an umbrella was compliant on the day it was checked. It says nothing about last Friday’s payroll.
Your liability is not annual. It applies every time your agency makes a payment.
SafeRec closes that gap. If a certified umbrella’s payslip and its HMRC filing stop matching, the issue is flagged straight away. You find out before HMRC does.
That is the difference between a badge and a live check.
What should your due diligence look like after JSL?
An umbrella holding FCSA, Professional Passport and SafeRec has passed two independent audits and is under continuous payroll monitoring. For agencies, that is the strongest third-party evidence currently available. It shows the umbrella runs genuine PAYE, pays HMRC correctly, and treats workers fairly.
After JSL starts, agencies need written proof that they chose responsibly. This gives you that proof. You can show HMRC, clients, and contractors that you used a real selection standard. One accreditation is good. Three, with one of them continuous, is a credible defence.
DASA holds FCSA and SafeRec accreditation alongside Professional Passport. Very few UK umbrellas hold all three. That is what makes DASA’s compliance position stand out for agencies managing JSL risk.
What should you check before signing with an umbrella?
Beyond accreditation, run your own checks. Confirm Companies House registration, an active VAT number, and valid employer’s liability insurance. Check their take-home pay claims. Any umbrella promising 80% or more is a warning sign. Legitimate PAYE umbrellas cannot deliver those numbers.
Beyond accreditation, you need to run your own checks. Start with the basics: Companies House registration, active VAT number, and valid employer’s liability insurance. If they cannot produce these straight away, do not proceed.
Next, look at take-home pay claims. Any umbrella promising contractors 80% or more take-home is signalling a problem. Legitimate PAYE umbrellas cannot deliver those numbers without using non-compliant tax arrangements. Walk away.
Ask to see a sample payslip. It should clearly show gross income, employer NIC deductions, employee NIC, and income tax. Net pay must be visible too. No unexplained "admin fees" or vague "employment costs." Every deduction should be clear.
Use the umbrella company calculator to cross-check take-home for any rate. If the numbers do not match a proper PAYE model, that is a red flag.
Download our JSL due diligence checklist for agencies.
What questions should you ask any umbrella company?
Ask these questions before adding any umbrella to your PSL. Confirm their FCSA or Professional Passport accreditation and the date of their last audit. Ask how they evidence PAYE payments to HMRC. Poor answers or evasive answers are grounds to reject them outright.
Ask these questions before adding any umbrella to your Preferred Supplier List. If they cannot answer clearly, do not add them.
1. Are you currently FCSA-accredited?
Ask them to confirm the date of their last audit. A lapsed accreditation counts as no accreditation.
2. Are you currently Professional Passport approved?
The same rule applies. Ask for current evidence, not historical claims.
3. Can you show us your last HMRC RTI submission record?
RTI (Real Time Information) filings show they reported payroll to HMRC on time. If they resist this question, that tells you everything.
4. What is your process when a contractor disputes their payslip?
Slow or evasive answers usually mean those complaints will end up back with your team.
5. How do you handle late timesheets from agencies?
Contractors still need to be paid. Find out how they handle it when your team misses a deadline.
6. What documentation can you provide if HMRC queries our supply chain?
A compliant umbrella should have clear, ready answers. A non-compliant one will not.
7. Do you run any non-PAYE payment models?
The answer must be no. Anything involving loans, credits, or offshore structures is a scheme.
Keep written records of the answers. If HMRC ever queries you under JSL rules, those records are your defence.
See our umbrella payroll for recruitment agencies for what DASA offers agencies directly.
FAQs
What is Joint and Several Liability for recruitment agencies?
From 6 April 2026, JSL rules mean recruitment agencies can be held jointly responsible for unpaid PAYE if their umbrella company doesn’t pay HMRC. HMRC can recover the unpaid tax directly from the agency.
What is FCSA accreditation for umbrella companies?
The FCSA independently audits umbrella companies against strict compliance standards. Accredited umbrellas run genuine PAYE, pay HMRC properly, and stay away from tax-avoidance schemes.
What is Professional Passport accreditation?
Professional Passport is another independent body that audits umbrella companies against its own compliance framework, covering PAYE, worker rights, and clear payroll practices.
Why does FCSA, Professional Passport and SafeRec accreditation matter?
It shows an umbrella has passed two separate independent audits and is monitored on an ongoing basis. SafeRec checks every payslip against HMRC RTI data and checks the umbrella’s HMRC tax account each month. For agencies, that’s the strongest evidence available that an umbrella is compliant under JSL rules.
What should recruitment agencies check before choosing an umbrella company?
Check Companies House registration, VAT number, insurance, FCSA and Professional Passport accreditation, sample payslips, and take-home pay claims. Any umbrella promising 80%+ take-home is a red flag.
How do JSL rules affect agency due diligence?
Post-JSL, agencies need documented proof that they chose their umbrella responsibly. Written records of due diligence checks, accreditation verification, and sample payslips all help build a credible compliance defence.
