For recruitment agencies who engage with umbrella companies, preparation plans in relation to Joint and Several Liability (JSL) should already be in motion. And that is the case for some of the larger agencies. We’re already seeing them reviewing supply chains and tightening Preferred Supplier Lists (PSLs), however others are planning to address it closer to April 2026. Here’s why that approach could leave you financially exposed.
Why timing matters more than many realise
JSL applies to payments made on or after 6 April 2026 – regardless of when the work was completed .
In practical terms, that means:
- If a contractor carries out work in March, but is paid in respect of that on or after 6th April 2026, the payment is still within scope of JSL
- Therefore, you need to immediately start enforcing your strict PSL, so that there are no contractors performing work under non-compliant umbrella companies that may be due payment on or after April 2026.
- Waiting until April to implement changes won’t protect you from liability for past placements that are billed later
For agencies operating at scale, this is a material consideration. Cashflow cycles, invoice timings and contractor payment dates will all influence your exposure.
A brief recap: what JSL means for agencies
Under the proposed legislation, HM Revenue & Customs (HMRC) will be able to pursue unpaid PAYE and NICs from both:
- the umbrella company
- the agency holding the contract with the end client for the supply of the worker (i.e. the top-tier agency or Managed Service Provider).
Where there is no agency in the chain, liability sits with the end client. Importantly, this is a strict liability position. There is no statutory defence based on having taken reasonable care or having conducted due diligence.
For agency owners and directors, that changes the risk profile significantly. It elevates umbrella selection and ongoing oversight from an operational task to a governance priority.
Why your PSL needs to be robust before March 2026
Because JSL is triggered by payment date, not work date, your supply chain needs to ideally be secure before the end of February 2026.
Leaving changes until the final weeks in the run up to April 2026 increases the risk that:
- contractors are still being paid through umbrellas you haven’t fully assessed
- switcher projects are rushed, increasing operational disruption
- you inherit liability for placements you believed were “pre-April”.
A considered PSL review, clear selection criteria, and an orderly transition plan will help protect you from financial risk.
Taking a proactive, strategic approach
At Focused, we’ve supported recruitment agencies through significant legislative change since 2003. From IR35 reform to evolving compliance standards, the pattern is consistent: agencies that prepare early retain control.
We work in partnership with senior stakeholders to:
- review existing umbrella relationships and identify potential compliance risk
- support structured contractor transitions where change is required
- provide a reliable, compliant umbrella company your agency can stand behind with confidence.
Our infrastructure is built for scale, and our service is built on responsiveness.
Protect your agency before the deadline protects you
April 2026 isn’t the point at which you start thinking about JSL. It’s the point at which liability becomes live. If your agency hasn’t already stress-tested its PSL, mapped payment timing risk and put a clear transition plan in place, now is the time to do it.
The earlier you act, the more control you retain – commercially, operationally and reputationally. If you’d value a strategic conversation about how to prepare your agency for JSL, our team is ready to support you.
Related article: Focused are SafeRec certified
At Focused, we believe transparency, compliance and trust aren’t just “a nice to have”, they’re non-negotiable. That’s why we’ve taken the step to become a SafeRec certified umbrella company.
Focused are SafeRec certified >