Joint and several liability came into force on 6th April 2026. HMRC can now pursue your agency directly for unpaid PAYE when an umbrella company in your supply chain fails to account correctly.
That changes what umbrella company due diligence for agencies actually means. It’s not a box-ticking exercise. It’s documented evidence that you assessed your partners, applied scrutiny, and took action where gaps existed.
What HMRC Will Look For
There is no official checklist for JSL compliance. HMRC has made this explicit. What investigators will look for is evidence: records that show who you work with, what checks you carried out, when you carried them out, and what you did when issues surfaced.
A one-off compliance check completed last year won’t be enough. Nor will an email from an umbrella company asserting that they’re compliant. You need structured, ongoing due diligence that produces a paper trail you can put in front of HMRC.
What Umbrella Company Due Diligence for Agencies Must Cover
Thorough umbrella company due diligence includes verification of FCSA accreditation or equivalent third-party assessment, evidence of correct PAYE and National Insurance treatment, confirmation of holiday pay and SSP handling, and checks against known non-compliant schemes.
Working with FCSA-accredited umbrella companies is one of the clearest ways to demonstrate you’ve done your homework. FCSA Members are independently assessed against the Code of Compliance. That assessment is ongoing. It covers PAYE, National Insurance, holiday pay, and worker rights.
Diligence Exchange, part of the Diligence Hub platform, gives your agency a centralised record of every due diligence check you’ve run. Every decision is timestamped. Every document is stored. If HMRC comes calling, your evidence is ready.
Stop Treating Due Diligence as a One-Off
The agencies most exposed under JSL are those who carried out a compliance check when they onboarded a new umbrella supplier, then assumed the job was done. Liability doesn’t reset because you checked once. If your umbrella partner becomes non-compliant after you onboarded them, you’re still on the hook.
Ongoing due diligence isn’t just best practice. It’s the only kind that counts.
Don’t wait for HMRC to find the gaps in your supply chain. Diligence Hub gives agencies the tools to build and maintain compliant, evidenced relationships with umbrella partners. Find out how Diligence Hub works at diligencehub.co.uk
