Joint and several liability is no longer theoretical. From 6 April 2026, recruitment agencies are on the hook for unpaid PAYE and NICs from umbrella companies in their supply chains. There is no safe harbour defence. But there is something agencies can do: build an evidence base that demonstrates genuine, ongoing due diligence.
What Counts as Evidence?
HMRC has not prescribed a specific due diligence checklist. What matters is that agencies can show a consistent, documented process. That means verifiable records of what checks were performed on each umbrella partner, timestamped documentation showing when those checks took place, and evidence of action taken when issues were identified.
Emails and spreadsheets will not cut it. Agencies need structured, searchable records that can be produced on demand.
Centralise or Risk Getting Caught Out
Many agencies work with multiple umbrella companies across different regions and sectors. Managing due diligence separately for each one, often across different teams and systems, creates gaps. Diligence Hub brings everything into one place: standardised checks, centralised documentation, and automated tracking.
The platform was built specifically for this purpose. It is not a repurposed CRM or a bolted-on feature. It is a dedicated compliance tool for the recruitment supply chain.
The Cost of Getting It Wrong
HMRC estimated annual continuing compliance costs at £21.7 million across the industry. That figure reflects the cost of doing due diligence properly. The cost of not doing it — an HMRC liability notice for someone else’s tax shortfall — could be significantly higher for an individual agency.
Start building your audit trail now. Visit diligencehub.co.uk to see how.
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