Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment HMRC has made of the risk of unpaid employer National Insurance contributions within labour supply chains providing temporary staffing to the NHS following the Ducas tax dispute; and whether she plans to introduce a statutory (a) accreditation and (b) licensing regime for umbrella companies operating in the labour market.

Umbrella companies are a type of employment intermediary that engages workers on behalf of recruitment agencies and end client organisations. Although many umbrella companies operate diligently, others are used to facilitate non-compliance including tax avoidance and fraud.

From 6 April 2026, recruitment agencies are responsible for ensuring that Pay As You Earn and National Insurance contributions obligations are met when they choose to use an umbrella company to engage a worker. Where these obligations are not met, HMRC will recover underpayments from the recruitment agency. If there is no recruitment agency involved in an arrangement with an umbrella company, this responsibility will fall to the end client organisation. The rules apply regardless of the sector in which workers are engaged.

The new rules are intended to drive behavioural change in the temporary labour market, increasing the amount of assurance undertaken by organisations that use umbrella companies to force non-compliance umbrella companies out of the market. This change is forecast to protect around £2.7 billion across the scorecard period up to and including 2030-31.

It is right that organisations that choose to use umbrella companies to engage workers should take steps to make sure that they are compliant. HMRC has published extensive guidance to support organisations that use umbrella companies to undertake assurance checks.