Switching umbrella companies is straightforward when you know the steps. Since April 2026, the compliance check before you move matters more than ever. This guide covers when to switch and what to verify. It also explains your holiday pay, pension, and P45.
For background on how umbrella companies work, read our guide to understanding umbrella companies first.
When should you switch umbrella companies?
You should switch when your current provider is non-compliant, when their margin is poor value, when your agency removes them from their Preferred Supplier List, or when you get a better offer from an accredited provider. Since April 2026, Joint and Several Liability rules mean agencies carry real legal risk from umbrella choice. Many now mandate specific approved providers.
Your agency tightened their PSL since April 2026? If your current umbrella isn’t on it, you switch or lose the contract. That’s the new reality under JSL.
If your provider can’t show FCSA or Professional Passport accreditation, switch. The risk isn’t worth it. HMRC can pursue contractors caught in non-compliant schemes.
If your margin crept up without explanation, that’s a valid reason to look elsewhere. Unclear payslips are too.
What to check before signing with a new umbrella
Before you sign anything, run through this checklist. Don’t 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. Check it on the relevant body’s website directly. Don’t accept a logo on a webpage as proof.
Margin transparency. What is the exact weekly margin in pounds? Get it in writing before you sign. A provider that won’t state their margin clearly is one to avoid.
Payslip clarity. Ask to see a sample payslip. It must 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 buried or missing, that’s a red flag.
Holiday pay method. Does the provider pay holiday pay rolled up with each payslip, or retained in a pot for when you take leave? Both methods are legal. Know which applies to you 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 nervous about JSL ask the same question.
Agencies now carry the JSL liability, so many have already done this vetting. Our guide on how agencies choose an umbrella company 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. This applies when their umbrella fails. That raised the stakes for everyone. Here’s how you verify a new provider independently.
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 obtain 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 gives it to you without hesitation.
Step 4: Read recent reviews from real contractors. Check Trustpilot and Google. Look for reviews mentioning 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’s on it and why.
DASA Umbrella holds dual accreditation from both FCSA and Professional Passport. Two independent bodies have checked the payroll process. Most providers hold one accreditation. Very few hold both. Read more about what makes an umbrella company compliant to understand what those checks cover.
How do you switch umbrella companies?
Switching is a four-step process. It’s quick when you’re 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 get confirmation back.
Step 2: Sign up with your new provider. Complete their onboarding before your last payroll date with the old provider. You’ll need your National Insurance number, bank details, and your contract details from your agency.
Step 3: Tell your agency. Your agency needs to issue a new assignment schedule to your new umbrella. They’ll 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. This ensures your tax code carries across correctly.
Use the DASA umbrella pay calculator to check your take-home 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’re entitled to it even if you leave mid-contract year.
If your old umbrella uses a retained pot, request your outstanding balance before you leave. Put the request in writing. They must pay it out when your employment ends.
Rolled-up holiday pay was paid to you 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 their workplace pension scheme. You’ll 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 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’ll overpay income tax until HMRC corrects it.
If your P45 doesn’t arrive within a week, contact your old umbrella in writing. They’re legally required to issue it. They’re legally required to issue it.
DASA Umbrella makes onboarding straightforward for contractors switching from another provider. You can start the process at DASA Umbrella.
