Compliance is no longer a checklist. With Joint and Several Liability taking effect in 2026, agencies and MSPs need umbrella partners that can prove what they do on every payroll run. Here is how to choose well – and avoid the risks.
What “compliant” looks like in practice
Compliance lives in the evidence. Ask providers to show itemised payslips that clearly set out Pay As You Earn (PAYE), National Insurance Contributions (NICs) and any deductions. Check that Real Time Information (RTI) submissions match those payslips and that PAYE is paid to HM Revenue & Customs (HMRC) on time, every month. Look for current accreditations and recent audit reports, for example FCSA and SafeRec. Insist on independent reporting so you can see automated checks on each payroll run.
That combination – transparent payslips, accurate RTI, on‑time HMRC payments, accreditations and independent reporting – is the practical definition of “compliant” you can defend to clients and auditors.
These standards align with the wider changes coming in 2026 – read more in our blog on umbrella legislation 2026
Four quick tests you can run this week
- Accreditation and audits: request current FCSA/SafeRec certificates and the latest audit reports, including dates and scope.
- Payslip and RTI review: sample payslips should be itemised and align with RTI; confirm you can access independent reporting on each run.
- Financial and service checks: review Companies House filings, service levels, contractor support channels and real feedback (e.g. Trustpilot).
- Contractual control: ensure right‑to‑audit and remediation clauses are in place, with clear timelines and responsibilities.
If any of these checks raise concerns, our article on how to switching umbrella partners without the pain explains how to move safely.
Red flags to avoid
Be wary of split or non‑itemised payslips, frequent amended filings, missing proof of PAYE and NICs remittance, or providers who cannot share recent independent audit evidence. Hesitation on right‑to‑audit clauses, poor working capital, slow issue resolution or vague “assurance letters” without data are further signs to walk away.
How to validate a short list
Move beyond presentations. Ask each umbrella to provide anomalised actual payslip examples to test calculations and deductions.. Compare the outputs to RTI and check the HMRC remittance confirmation the following month. These in depth checks give you proof of current service compliance before you transition. At the same time, train your consultants on what is changing, line up contractor FAQs and agree on a transition window that avoids peak pay cycles.
Why this matters commercially
The JSL rules increase supply‑chain risk for agencies and MSPs, making documented due diligence and audit trails important to mitigate potential recovery of tax by HMRC. Choosing a partner that evidences compliance every pay cycle reduces operational noise, prevents client escalations and shortens onboarding. It also protects contractor experience – accurate, on‑time, transparent pay – which is what keeps your books filled.
A pragmatic path forward
Treat umbrella selection as a control framework, not a one‑off procurement.
Build evidence into BAU: independent reporting, periodic audits and quarterly service reviews.
Keep a strict Preferred Supplier List and score suppliers against the same criteria, so changes are fast and defensible if issues emerge.
If you want a quick PSL health check or help setting up independent reporting across payroll runs, we can support without disruption.
Explore more resources and practical tools in our Umbrella Compliance Hub
