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, umbrella margin, gross pay, income tax, employee NIC, and net pay. Every line should be labelled clearly.
Holiday pay method. Does the umbrella use rolled-up holiday pay (added to each payslip) or accrued holiday pay (held and paid when you take leave)? Both are legal. You need to know which one applies.
Pension arrangements. Confirm they run auto-enrolment. Ask which pension provider they use. Your pension savings from your old umbrella stay in your pot. They belong to you.
Read the umbrella compliance guide for the full checklist.
How to switch umbrella companies step by step
Give notice to your current umbrella. Check your contract for the notice period. Most umbrella contracts have a one-week notice period. Some have none. Give written notice by email and keep a copy.
Sign up with your new umbrella. Complete their registration form. Provide your P45 once you have it. If you don’t have a P45 yet, the new umbrella will put you on an emergency tax code temporarily.
Tell your agency. Email your agency contact. Say you’re switching umbrella and give them the new umbrella’s payment details. Most agencies need the umbrella’s company name, bank details, and a contact person.
Collect your P45. Your old umbrella must issue a P45 when you leave. This shows your earnings and tax paid in the current tax year. Give it to your new umbrella before your first payslip.
Check your first payslip from the new umbrella. Make sure your tax code is correct. Confirm the margin matches what you agreed. Check that holiday pay is shown correctly.
Use the umbrella pay calculator to verify your take-home matches expectations.
What happens to your holiday pay when you switch?
If your old umbrella uses a retained holiday pay pot, request payout of the outstanding balance before you leave. The money is yours. They must pay it.
If your old umbrella used rolled-up holiday pay, it was already paid to you with each payslip. There’s nothing to transfer.
Your new umbrella starts your holiday pay accrual from day one. Check their method so you know what to expect on your first payslip.
What happens to your pension when you switch?
Your pension savings stay in your pot. The money belongs to you. Your new umbrella will enrol you in their own workplace pension scheme. You can merge the two pots later through a pension transfer. Speak to your pension provider about the process.
How does JSL affect switching in 2026?
Since April 2026, agencies are jointly liable for unpaid PAYE if their umbrella fails. Many agencies now mandate FCSA or Professional Passport-accredited providers. If your agency has updated their PSL, you may need to switch to an approved provider to keep your contract.
Read our agency umbrella vetting guide to understand what agencies look for.
DASA Umbrella holds dual accreditation from FCSA and Professional Passport. That makes DASA a strong fit for agencies building a compliant PSL. Find out more about DASA’s compliance-led umbrella company.
Frequently asked questions
How do I switch umbrella companies?
Give notice to your current umbrella, sign up with your new provider, tell your agency to update payment instructions, 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, confirm the exact weekly margin in writing, ask for a sample payslip, clarify the holiday pay method, and confirm they use RTI reporting to HMRC.
What happens to my holiday pay when I switch umbrella companies?
If your old umbrella uses a retained pot, request payout of the outstanding balance before you leave. If they used rolled-up holiday pay, it was already paid to you with each payslip.
What happens to my pension when I switch umbrella companies?
Your pension savings stay in your pot. The money belongs to you. Your new umbrella will enrol you in their 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 to avoid being put 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 mandate FCSA or Professional Passport-accredited providers. If your agency has updated their PSL, you may need to switch to an approved provider to keep your contract.
