Joint and several liability: our most frequently asked questions

The incoming umbrella legislation is reshaping how agencies and MSPs think about responsibility, risk and oversight across their supply chains.
From April 2026, the party closest to (and contracted with) the end client – often the agency or MSP – may be held jointly and severally liable for unpaid PAYE and National Insurance where non-compliance occurs elsewhere in the chain.
As implementation approaches, we’re hearing from more and more agencies and MSPs who recognise the significance of the shift, but aren’t always clear what it means in practical, day-to-day terms. That’s where we can help.
Below are some of the most common questions we’re being asked – in plain English, with practical answers to support agencies and MSPs strengthening supply-chain governance and reviewing PSLs under the new framework.

What is joint and several liability (JSL)?

JSL means more than one organisation can be held responsible for the same unpaid tax liability.
In the umbrella context, the April 2026 legislation gives HMRC the ability to pursue unpaid PAYE and NICs from another party in the labour supply chain where an umbrella has failed to operate payroll correctly.
The key point is simple: under JSL, the only legal test that ultimately matters is whether PAYE and NICs were paid correctly to HMRC – not whether policies existed, audits were completed, or compliance could be evidenced.
For agencies and MSPs, this means compliance can’t be outsourced – and risk can’t be ignored simply because it sits elsewhere in the chain.

Why does JSL matter to agencies and MSPs specifically?

Because it changes both the risk and the operational expectation.
Financial exposure:
HMRC can recover unpaid liabilities on a joint and several basis – even if the operational failure occurred elsewhere.
Reputation risk:
Contractor pay issues and deductions disputes escalate fast and can damage trust with both contractors and clients.
Operational impact:
Supplier governance needs to be consistent, repeatable and real – not just documented.

Who is most exposed under JSL?

In most models, it’s the organisation closest to the end client and holding the contract – commonly the agency or the MSP.
That’s why JSL is pushing supplier decisions up the agenda. Not because paperwork creates safety, but because real operational visibility, supplier quality and governance confidence now matter far more.

Does JSL mean the agency is liable for everything an umbrella does?

No. But it does mean agencies and MSPs must run their supply chains on the basis that liability can arise if tax is unpaid, regardless of where the failure occurs.
In practice, that means focusing on:
Knowing who is in your supply chain (and why)
Setting clear operational standards
Applying those standards consistently
Building real visibility into payroll and reporting
Having escalation and remediation routes that work in the real world
This isn’t about defensibility – it’s about reducing the likelihood of failure and spotting issues early.

What should agencies and MSPs be doing now, ahead of April 2026?

Three practical priorities:
1) Set non-negotiable PSL standards
Decide what “compliant and dependable” means for your business – operationally and financially – and document it.
2) Build evidence into BAU
Not as protection, but as visibility. You want regular insight into what’s happening, not a scramble for documents after a problem appears.
3) Protect the contractor experience
If you need to change suppliers, plan communications, onboarding and support so you don’t trigger avoidable churn.

What does “good due diligence” look like under JSL?

It’s not just what you check – it’s what you can see and understand in practice.
At a minimum, agencies and MSPs should be able to access:
Current accreditations (e.g. FCSA, SafeRec) and what they actually cover
Independent audit evidence (scope, dates, outcomes)
Transparent, itemised payslips showing PAYE and NIC treatment
Proof of RTI submission
Proof of PAYE/NIC payments to HMRC
Clear processes for pensions, statutory payments and deductions
A contractual right to audit
Named escalation contacts and documented resolution routes
Not because this creates protection – but because it creates confidence, visibility and early warning.

What are the biggest red flags to look out for when reviewing umbrella providers?

Patterns that consistently signal risk:
Payslips without clear PAYE/NIC itemisation
Fragmented or split payroll documents
Weak or outdated independent audit evidence
Frequent amended tax filings without a clear explanation
Unclear cross-border structures
Poor service delivery (because service failure quickly becomes risk failure)

If a provider can’t explain their model clearly and show what happens month after month, confidence should be low.

What should we ask umbrella partners to provide during a PSL review?

Ask for a practical JSL visibility pack, including:
Accreditation and audit scope
Sample payslips
RTI evidence
HMRC payment evidence
Statutory and pension processes
SLA/performance metrics
Right-to-audit commitments
Access to repeatable reporting

Strong partners won’t just send PDFs – they’ll give you ongoing access to information, not one-off documents.

Is accreditation enough on its own?

No.
Accreditation is a baseline, not a guarantee. In a JSL world, confidence comes from consistent operational transparency, not badges.
The strongest approach is layered – not as protection from liability, but as a way to reduce risk and increase confidence:
Independent accreditation
Independent reporting/auditing
Operational transparency
Reliable service performance

How is Sapphire responding to JSL – beyond “more paperwork”?

Sapphire is FCSA-accredited (seven consecutive years), SafeRec Certified and an APSCo Trusted Partner, with a 4.9 Trustpilot rating (4,106 reviews). But service quality matters because when payroll fails, everyone feels it.
The question agencies now ask isn’t “are you accredited?” – it’s:
“How can we see what’s happening month after month?”
That’s why we’re enhancing agency visibility.

Coming soon: live dashboard access for agencies
Our new customer portal will give agencies direct access to:
Monthly P32 summaries (PAYE/NIC liabilities)
Proof of RTI submission and IR Marks direct from HMRC
Downloadable HMRC payment confirmations
Filtered payslip access by tax month and agency

Plus monthly confirmation emails including:
P32 copies
Confirmation of HMRC payment clearance

The outcome isn’t “compliance theatre” – it’s real visibility, cleaner audit trails and stronger operational confidence.

How do we strengthen governance without creating loads of admin?

Focus on repeatability, not heaviness.
The most effective models include:
Clear minimum standards
Centralised evidence access
Regular reporting
Consistent consultant training
Automated visibility where possible

Good governance should reduce friction over time – not increase it.

What should we do if we spot a potential compliance issue?

Act early and clearly:
Escalate immediately
Request evidence in writing
Agree remediation steps and timelines
Pause onboarding if confidence drops
Prioritise contractor pay and communication

Early action prevents operational damage.

The takeaway for agencies and MSPs

The safest route is to work with umbrella partners who combine strong compliance foundations with ongoing transparency, operational stability and financial sustainability.
Not because this creates legal protection – but because it creates confidence, visibility and early warning.
That’s how Sapphire operates, and it’s why agencies and MSPs are choosing to work with us.

Want a PSL visibility review ahead of April 2026?

If you’re reviewing your umbrella PSL for JSL readiness, we can help you pressure-test what you have today and identify what real operational visibility looks like – including how our upcoming agency dashboard supports cleaner monthly governance and confidence.