Choosing the wrong umbrella company now carries real financial risk. From April 2026, JSL makes agencies liable for unpaid PAYE. If an umbrella fails to pay HMRC, the agency can end up facing the bill. 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 can be chased for that tax. Choosing the wrong umbrella is no longer just a reputational risk. It is a direct financial and legal liability.
Before April 2026, agencies mainly faced reputational damage from non-compliant umbrellas. That was serious enough. Now HMRC has the legal power to pursue agencies directly and recover tax that an umbrella failed to pay. You do not have to be involved in the non-compliance. You only have to have used that umbrella.
The mechanics are simple. Your umbrella collects PAYE from contractors. If it keeps that money instead of paying HMRC, HMRC can recover the unpaid amount from you. The liability is joint, so they do not have to go after the umbrella’s assets first. They can come straight to your agency.
Read our full JSL guide for agencies to see how the rules work.
What does FCSA accreditation mean for agencies post-JSL?
The FCSA (Freelancer and Contractor Services Association) independently 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 due diligence steps you can take.
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 review how deductions are explained to contractors. If an umbrella fails, it loses accreditation.
For your agency, that means an independent check has already been done and documented. If HMRC ever looks at your supply chain, FCSA accreditation helps show you acted responsibly. That matters when joint liability is on the table.
See the umbrella compliance guide.
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. An umbrella with Professional Passport approval has passed a second, independent compliance check.
The two bodies do not share audit results. Passing one does not mean you automatically pass the other. Holding both means clearing two separate compliance hurdles. Two different auditors have confirmed the same thing. That is a stronger position than holding just one.
Professional Passport also focuses on fair treatment of workers. That matters to agencies too. Workers who are paid correctly and treated fairly are less likely to come back to you with complaints.
What does SafeRec certification add that the others don’t?
SafeRec audits every payslip as it is generated, not once a year. Each payslip is cross-checked 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.
That 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 runs with every payment your agency makes.
SafeRec closes that gap. If a certified umbrella’s payslip and its HMRC filing stop matching, the anomaly 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 position look like post-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.
Post-JSL, agencies need documented proof that they chose responsibly. This gives you that proof. You can show HMRC, clients, and contractors that you applied 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 should still run your own checks. Start with the basics: Companies House registration, an active VAT number, and valid employer’s liability insurance. If they cannot produce these immediately, do not proceed.
Next, look closely 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 also be visible. There should be no unexplained “admin fees” or vague “employment costs.” Every deduction must be visible.
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 evasion are grounds to reject them outright.
Ask these questions before adding any umbrella to your Preferred Supplier List. Poor answers or evasion are grounds to reject them outright.
1. Are you currently FCSA-accredited?
Ask them to confirm the date of their last audit. Lapsed accreditation counts as no accreditation.
2. Are you currently Professional Passport approved?
The same rule applies here. Ask for current evidence, not historical claims.
3. Can you show us your last HMRC RTI submission record?
RTI (Real Time Information) filings prove they are reporting 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 contractor complaints will end up back on your desk.
5. How do you handle late timesheets from agencies?
Contractors still need to get paid. Find out how they manage the process when your team misses a deadline.
6. What documentation can you provide if HMRC queries our supply chain?
A compliant umbrella will 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, these records are part of your defence.
See our umbrella payroll for recruitment agencies for what DASA offers agencies directly.
