Joint & Several Liability 2026
Government to Introduce Joint & Several Liability. Orbital have you covered. Here's what to expect
Introduction
When joint and several liability (JSL) becomes legislation in the UK in April 2026, it will significantly change the compliance landscape for recruitment agencies working with umbrella/payroll companies.
We have a full detailed write-up, including a bullet-proof checklist to ensure you're covered and how Orbital protects agencies. It is recommended to read our full publication and contact us when you need us.
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About Joint and Several Liability
What is Joint and Several Liability?
Under JSL, multiple parties can each be held fully responsible for a shared obligation. In this context, if an umbrella company fails to pay the correct tax (e.g., PAYE or NICs), the recruitment agency that engaged them can also be held liable — even if the agency wasn’t directly involved in the wrongdoing.
Key Implications for Recruitment Agencies
Full Financial Liability
Agencies could be forced to pay the full amount of unpaid taxes if the umbrella company defaults.
Due Diligence Isn't Enough
Traditional compliance methods like moment-in-time ‘audits’, spot checks, accreditations, or policies won’t suffice. Agencies must be able to prove in real-time, that tax has been correctly calculated, reported, and paid.
Reputational and Legal Risk
Beyond financial penalties, agencies face potential reputational damage and legal consequences if found liable.
Shift in Responsibility
Agencies can no longer assume that tax compliance is solely the umbrella company’s responsibility. They must now actively monitor and verify compliance.
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We have a full detailed write-up, including a bullet-proof checklist to ensure you're covered and how Orbital protects agencies. It is recommended to read our full publication and contact us when you need us.
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