Upcoming Tax Changes and Joint & Several Liability Reform: What Clients Need to Know Ahead of April 2026

The government’s ongoing focus on supply chain compliance means further changes are on the horizon for businesses that rely on a temporary workforce. From April 2026, reforms to Joint & Several Liability (JSL) will come into force, alongside continued scrutiny of PAYE and umbrella arrangements.

While headlines around tax reform can feel daunting, these changes are ultimately designed to bring greater transparency and fairness to the labour supply chain. For compliant businesses, they also provide an opportunity to strengthen processes and reduce long-term risk.

Here’s what’s changing, what it means for clients, and how to prepare.

What is changing from April 2026?

The April 2026 reforms will extend Joint & Several Liability further up the labour supply chain. In simple terms, HMRC will have greater power to recover unpaid PAYE, National Insurance and other employment taxes not just from the umbrella company or intermediary, but from other parties in the chain if non-compliance is identified.

This means that end clients and agencies may be held financially responsible if tax obligations are not met by suppliers they work with, even if the failure sits further down the chain.

The intention is clear: to discourage the use of non-compliant umbrella companies and labour providers, and to ensure everyone involved takes reasonable steps to verify who they are working with.

Why this matters to end clients

For transport operators and logistics businesses, these changes increase the importance of knowing exactly how workers in your supply chain are paid.

If non-compliance is uncovered after April 2026, HMRC will be able to pursue parties who benefited from the labour supply, not just those who operated payroll. That brings potential financial exposure, reputational risk and operational disruption.

The key message is that “not knowing” is no longer an acceptable defence. Due diligence is becoming a necessity, not a nice-to-have.

 Practical actions clients should take now

Although April 2026 may feel some way off, preparation should start now. Practical steps include:

• Reviewing your current labour supply chain and understanding who is responsible for payroll and employment taxes
 • Asking recruitment partners about their compliance processes and supplier checks
 • Ensuring umbrella companies used are reputable, audited and transparent
 • Keeping clear records of due diligence and supplier assurances
 • Avoiding schemes that promise higher take-home pay through artificial arrangements or unclear deductions

Working with compliant partners who can evidence their processes will significantly reduce your exposure.

The role of umbrella companies

Umbrella companies remain a legitimate option when operated correctly, but they are firmly in HMRC’s spotlight. The reforms aim to eliminate disguised remuneration schemes and other practices that leave workers, and those who engage them, exposed.

Clients should be confident that any umbrella company in their supply chain operates PAYE correctly, applies employment rights properly and is regularly audited.

Our approach at Driver Require

At Driver Require, compliance has always been central to how we operate. We are FCSA accredited and only work with umbrella companies that meet the same high standards. In addition to FCSA accreditation, the umbrella companies we partner with are also SafeRec approved, providing an extra layer of security and reassurance. SafeRec carries out weekly audits of drivers’ payslips, helping to ensure ongoing compliance and transparency across the supply chain. For our clients, this means confidence that workers are paid correctly, obligations are met, and risk is minimised both now and as regulation continues to tighten.

As more businesses begin to review their labour supply chain ahead of the April 2026 reforms, this level of scrutiny can only be a positive step. It’s important to remember that if an agency is offering rates that appear significantly cheaper than the rest of the market, there is often a reason for it. In many cases, those savings are achieved by cutting corners on compliance, which can leave end clients exposed to liability for unpaid National Insurance or other employment taxes. By working with a fully compliant partner, clients can protect their business while ensuring their workforce is paid correctly and fairly.

Looking ahead with confidence

The April 2026 Joint & Several Liability reforms will undoubtedly change expectations across the labour market, but for businesses that prioritise compliance, they should not be a cause for concern.

By working with trusted, accredited partners and taking sensible steps now, clients can protect their operations, their reputation and their workforce.

If you’d like to discuss what these changes mean for your business or review your current arrangements, our team is always happy to help.