Since 6 April 2026, the PAYE is yours
Where an umbrella company employs workers supplied to an end client, responsibility for making sure PAYE is operated correctly sits with the agency that holds the contract with that end client, or with the end client where there is no agency. HMRC can recover any underpayment from that party. It applies to money paid to workers on or after 6 April 2026, so it is live now.
There is no due diligence defence written into these rules. That is the part worth sitting with. Nothing you can produce afterwards makes the bill go away, so the protection is entirely in the choosing and the watching: which umbrellas you allow into the chain, what you knew about each, and how quickly you reacted when something changed. Evidence of ongoing assessment will not be a legal defence to the PAYE recovery, but it is the difference between a supply chain you can defend commercially and one you cannot describe at all.
And the ground moves again
Separately from the tax change, the Employment Rights Act 2025 brings umbrella companies inside the employment business regime, with the Fair Work Agency enforcing it. Dates for the detail are still being set, so treat any specific one you are given, including ours, as provisional until the regulations are laid. The direction is not provisional: the umbrella chain stops being somebody else’s problem. An agency whose records already treat each umbrella as a first-class file, with evidence, expiries and linked placements, meets that as an administrative change.
What the software has to do
- A register, not a folder. Every umbrella in the chain as a record, with the evidence held against it and expiry dates that chase themselves.
- The join to placements. Which workers, on which placements, are being paid through which umbrella, right now. This is the question the liability turns on, and it must be one click, not a reconciliation.
- The red flag. Live placements through an umbrella whose file has gone stale must be loud, on the first screen someone opens in the morning.
- Proof it was watched. Evidence added, checks recorded, all on an audit trail that shows assessment was ongoing, not annual.
BookKept treats the umbrella chain as a first-class record
Every umbrella placement must name its umbrella company; each company carries its own evidence file with expiry chasing; the compliance dashboard shows the evidence position per umbrella with live placement counts and red flags; and every evidence act lands on a hash-chained audit trail. The join an inspector asks for is the product’s spine, not an export.