From April 2026, the UK recruitment landscape is undergoing one of the most significant compliance shifts in recent years.
If your school or trust engages temporary staff via agencies using umbrella companies, these changes directly impact risk and accountability, and should strongly influence supplier choice.
This guide breaks down what’s changing, what it means for schools and agencies, what you should now be asking your recruitment partners, and how TailorEDucation is responding.
What Are the Umbrella Company Changes in April 2026?
From 6 April 2026, new legislation introduces Joint and Several Liability (JSL) across labour supply chains involving umbrella companies.
In simple terms, responsibility for PAYE and National Insurance is no longer just with the umbrella company, with recruitment agencies (and in some cases, end clients like schools) now being held liable.
So it’s a change that every agency needs to be aware of and so too should schools who utilise agency staff.
If an umbrella company fails to correctly deduct or pay tax, HMRC can recover the unpaid tax from the agency, or from the end client (school) if no agency is involved.
This is a major shift. Previously, umbrella companies carried the bulk of compliance responsibility. Now, that responsibility is shared across the entire supply chain, which the team here at TED feel is a welcome change.
The aim from government is clear: eliminate tax avoidance schemes, improve transparency, and protect workers and compliant businesses.
What Does This Mean for Schools?
To be direct – this is no longer “just an agency problem”.
Even if you are not directly contracting with an umbrella company, your school could be exposed if your agency of choice uses a non-compliant umbrella, PAYE or NICs are not correctly applied, or there is a breakdown in the supply chain.
This means increased risk exposure, including financial liability, reputational damage, and HMRC scrutiny.
It also means greater responsibility in supplier selection. Schools must now ensure they are working with agencies who actively manage compliance and operate transparent and auditable supply chains.
There is also a clear shift towards compliance-first partnerships. Cost can no longer be the only driver. Compliance and risk management must now sit at the centre of procurement decisions.
At least that’s what we, at TED, feel.
What Should Schools Be Asking Their Recruitment Agencies?
If you’re working with agencies supplying umbrella workers, every school must ensure you are satisfied with how that agency is dealing with the changes.
You should be asking which umbrella companies the agency works with, whether there is a preferred supplier list, whether those providers are audited regularly, and how those audits take place.
You should also understand what due diligence is carried out, how PAYE compliance is verified, and how often this is reviewed.
It is critical to ask what happens if there is a compliance failure, who takes responsibility, and what protections are in place for the school.
You should expect agencies to evidence compliance through documentation, audit trails, and payroll transparency, and to clearly explain how workers are paid, including whether payslips are fully PAYE compliant (and how these payslips are verified).
If an agency struggles to answer these clearly, this would be cause for concern.
What Evidence of Compliance Should Schools Request?
Given the new liability rules, schools should expect clear, tangible evidence rather than assurances. This is exactly what HMRC are hoping to get away from with the new legislation.
This includes payslip transparency showing clear PAYE deductions, umbrella company audit reports, contracts between agencies and umbrella providers, confirmation of PAYE operation, evidence of ongoing due diligence processes, and clarity around insurance or indemnity positioning.
The key principle is simple: if it cannot be evidenced, it should not be trusted. We know it might sound dramatic, but it’s true.
How TailorEDucation Is Responding
Here at TailorEDucation we aim to pay candidates PAYE directly. Where a candidate prefers to use an umbrella company, we only work with FCSA accredited providers to ensure the highest standards of compliance. As a Recruiter Partner of the Freelancer & Contractor Services Association (FCSA), we are committed to compliant and transparent payment practices.
We recognise that schools need more than just candidates – they need certainty, compliance, and protection. It’s that simple.
We operate a controlled supply chain, working only with fully vetted umbrella partners who meet strict entry requirements and are subject to ongoing review.
Our umbrella partners undergo regular compliance checks, payroll verification processes, and continuous monitoring.
We provide transparent processes, including clear breakdowns of pay, full visibility of the supply chain, and open access to compliance documentation.
Our approach is built around risk mitigation, reducing exposure for schools, ensuring correct PAYE handling, and aligning with HMRC expectations.
We also engage with education-focused compliance expertise, understanding school safeguarding requirements, education-specific compliance expectations, and audit standards aligned with frameworks and inspections.
Final Thoughts
The April 2026 umbrella changes mark a clear shift.
Compliance is & will now always be a shared responsibility. Due diligence is no longer internal, it is expected across the supply chain.
Schools that adapt early and understand the importance of having clarity from the agencies they work with around the JSL will reduce risk, strengthen supplier relationships, and stay ahead of regulatory pressure.
What can you do?
Speak to the TED team.
If you would like to understand how these changes impact your school, or want to review your current agency setup, we are here to help.
Speak to a TailorEDucation consultant today. We will walk you through your current exposure, what good looks like under the new rules, and how to build a compliant, future-proof supply chain.