Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions she has had with recruitment agencies on compliance with their new responsibilities in relation to umbrella company legislation by April 2026.

The government is introducing legislation to close the tax gap and make the tax system fairer by making recruitment agencies using umbrella companies legally responsible for accounting for PAYE on workers’ pay. As set out at Autumn Budget 2024, this is expected to protect around £2.8 billion from being lost to umbrella company non-compliance across the scorecard period to 2029-30.

Officials have engaged extensively with representatives of the recruitment industry in relation to this measure and will continue to do so.

The government will set out full details of how this measure will operate, alongside draft legislation, later this year. The government will engage with stakeholders to ensure that they have the opportunity to provide feedback before legislation is introduced into Parliament.

The government is committed to supporting businesses to prepare for the implementation of this measure and, to this end, will publish technical guidance for businesses that will be affected by it.