Switching umbrella companies is usually simple if you know the process. Since April 2026, the compliance check before you move matters. This guide explains when to switch, what to verify, and how holiday pay, pension, and your P45 work.
For background, read what an umbrella company does first.
When should you switch umbrella companies?
You should switch if your current provider is non-compliant, charges a poor margin, gets removed from your agency’s Preferred Supplier List, or if an accredited provider gives you a better offer. Since April 2026, Joint and Several Liability rules mean agencies carry real legal risk from umbrella choice. Many now require approved providers.
If your agency has tightened its PSL since April 2026, you may not have a choice. If your current umbrella is not on it, you switch or lose the contract. That is the reality under JSL.
If your provider cannot show FCSA or Professional Passport accreditation, switch. The risk is not worth it. HMRC can pursue contractors caught in non-compliant schemes.
If your margin has gone up without a clear reason, that is a valid reason to look elsewhere. The same goes for payslips that do not make sense.
What to check before signing with a new umbrella
Before you sign anything, go through this checklist. Do not skip steps because a sales rep sounds convincing.
Compliance accreditation. Does the provider hold FCSA accreditation, Professional Passport accreditation, or both? Ask for the accreditation number and check it on the body’s website yourself. A logo on a webpage is not proof.
Margin transparency. What is the exact weekly margin in pounds? Get it in writing before you sign. If a provider will not state the margin clearly, walk away.
Payslip clarity. Ask for a sample payslip. It should show contract income, employer NIC, the umbrella margin, gross pay, employee NIC, income tax, and net pay as separate line items. If employer NIC is hidden or missing, that is a red flag.
Holiday pay method. Does the provider pay holiday pay with each payslip, or keep it in a pot until you take leave? Both methods are legal. Know which one applies before you switch.
HMRC payment record. Ask directly: does the provider pay PAYE and NIC to HMRC in real time? Compliant umbrella companies use RTI (Real Time Information) reporting. Agencies worried about JSL ask the same question.
Agencies now carry the JSL liability, so many have already done this vetting. The guide on umbrella company vetting for agencies explains what PSL vetting looks like.
How to verify your new umbrella is compliant (post-April 2026 checklist)
Since April 2026, JSL means agencies are jointly liable for unpaid PAYE when an umbrella fails. That raises the stakes for everyone. Here is how you check a new provider for yourself.
Step 1: Check FCSA membership. Go to fcsa.org.uk and search the member list. FCSA audits member companies against a code of conduct that covers PAYE compliance, holiday pay, and fee transparency.
Step 2: Check Professional Passport approval. Go to professional-passport.co.uk and search the approved list. Professional Passport runs independent payroll audits. Membership is harder to get than a simple self-declaration.
Step 3: Ask for proof of HMRC registration. All umbrella companies must register with HMRC as employers. Ask for their PAYE reference number. A legitimate provider will give it to you without hesitation.
Step 4: Read recent reviews from real contractors. Check Trustpilot and Google. Look for reviews that mention payslip accuracy and prompt payment. Ignore reviews that only talk about onboarding speed.
Step 5: Ask your agency. Since JSL came in, agencies have a financial reason to vet umbrella providers carefully. If your agency has a PSL, ask who is on it and why.
DASA Umbrella has accreditation from FCSA, Professional Passport, and SafeRec. Three independent bodies check the payroll process. Most providers hold one. Very few hold all three. Read the umbrella company compliance requirements to understand what those checks cover.
How do you switch umbrella companies?
Switching is a four-step process. It is quick when you are prepared.
Step 1: Give notice to your current umbrella. Check your contract for the notice period. Most umbrellas ask for one to four weeks. Give notice in writing and keep the confirmation.
Step 2: Sign up with your new provider. Complete onboarding before your last payroll date with the old provider. You will need your National Insurance number, bank details, and contract details from your agency.
Step 3: Tell your agency. Your agency needs to issue a new assignment schedule to your new umbrella. They will update their payment instructions. Give them enough notice to avoid a missed payroll.
Step 4: Collect your P45. Your old umbrella issues a P45 when you leave. Give it to your new umbrella on day one. That helps your tax code carry across correctly.
Use the umbrella company calculator to check your take-home pay with a new provider. Do this before you commit.
What happens to your holiday pay when you switch?
Your holiday pay entitlement at your old umbrella is yours. You are entitled to it even if you leave mid-contract year.
If your old umbrella uses a retained pot, request the balance before you leave. Put the request in writing. They must pay it out when your employment ends.
If holiday pay is rolled up, it was paid with each payslip. Make sure your new umbrella’s holiday pay method suits you going forward.
What happens to your pension when you switch?
Your workplace pension contributions stay in your pension pot. The pot belongs to you. Switching umbrella companies does not affect your pension savings.
Your new umbrella will enrol you in its workplace pension scheme. You will end up with two separate pension pots. You can merge them later through a pension transfer if you want to.
Bring your pension provider details from your old umbrella. That way you can check the contributions landed correctly before the old payroll closes.
What about your P45?
Your old umbrella must issue a P45 when you leave their employment. It shows your total earnings and tax paid for the year to that point.
Give your P45 to your new umbrella before your first payslip. Without it, they use an emergency tax code. You will overpay income tax until HMRC corrects it.
If your P45 does not arrive within a week, contact your old umbrella in writing. They are legally required to issue it.
If you are switching from another provider, DASA is a compliant umbrella company. Start the switching process directly on the site.
FAQs
How do I switch umbrella companies?
Give notice to your current umbrella, sign up with your new provider, ask your agency to update the payment details, and collect your P45. Most switches take one to four weeks, depending on your notice period.
What should I check before signing with a new umbrella?
Check FCSA and Professional Passport accreditation, ask for the weekly margin in writing, request a sample payslip, confirm how holiday pay is handled, and make sure they report through RTI to HMRC.
What happens to my holiday pay when I switch umbrella companies?
If your old umbrella keeps holiday pay in a retained pot, ask for the remaining balance before you leave. If it used rolled-up holiday pay, that amount was already paid with each payslip.
What happens to my pension when I switch umbrella companies?
Your pension savings stay in your pot. The money is yours. Your new umbrella will enrol you in its own workplace pension scheme. You can merge the two pots later through a pension transfer.
Do I need a P45 when switching umbrella companies?
Yes. Your old umbrella must issue a P45 when you leave. Give it to your new umbrella before your first payslip so you do not end up on an emergency tax code.
How does JSL affect switching umbrella companies in 2026?
Since April 2026, agencies are jointly liable for unpaid PAYE if their umbrella fails. Many agencies now require FCSA or Professional Passport accredited providers. If your agency has updated its PSL, you may need to move to an approved provider to keep your contract.
