“Did you know that rogue umbrella companies cost UK taxpayers £2.8 billion annually through tax avoidance and fraud?”

At FutureLink Group, we’re dedicated to protecting workers and businesses from non-compliant practices in the umbrella company market. With new government legislation set for April 2026, we’re proud to lead the way as a trusted, compliant umbrella company, ensuring transparency and security for our clients and workers.

Key Areas We Will Cover:

• Understanding umbrella companies and the issue of non-compliance.
• Key changes in the 2026 legislation and their impact.
• How FutureLink Group ensures compliance and protects workers.
• The role of the Employment Rights Bill in regulating the market.
• Practical steps for agencies, clients, and workers to stay compliant.

Introduction:
As a leading compliant umbrella company, FutureLink Group is committed to supporting the UK’s temporary labour market, which employs around 700,000 workers annually. However, non-compliance, including tax avoidance and employment rights violations, has long plagued the industry, costing the Exchequer £500 million in 2022-23 alone. The UK government’s draft legislation, Umbrella Companies: Tackling Non-Compliance in the Umbrella Company Market (published 21 July 2025), introduces transformative measures effective from April 2026.

 At FutureLink Group, we welcome these reforms, which align with our mission to deliver transparent, compliant payroll services. This article explores the upcoming changes and how we’re helping workers and businesses navigate them.

What Are Umbrella Companies and Why the Concern? 

Umbrella companies like FutureLink Group serve as employment intermediaries, managing payroll and tax obligations for temporary workers on behalf of recruitment agencies or end clients. While we pride ourselves on compliance, some operators engage in practices like disguised remuneration, VAT fraud, and withholding employment rights, costing taxpayers billions and exploiting workers. These issues harm workers with unexpected tax liabilities and disadvantage compliant businesses like ours by allowing rogue firms to undercut fair competition.

Common Non-Compliance Issues

• Tax Avoidance: Disguised remuneration schemes misclassify payments to evade taxes.
• Mini Umbrella Company Fraud: Rogue firms exploit VAT Flat Rate Schemes and Employment Allowance, often using offshore directors.
• Employment Rights Violations: Workers face issues like opaque payslips or incorrect holiday pay.
• Market Distortion: Non-compliant firms undermine businesses like FutureLink Group, which prioritise fairness and compliance.

Key Provisions of the 2026 Legislation

The government’s draft legislation, effective from 6 April 2026, shifts Pay As You Earn (PAYE) and National Insurance Contributions (NICs) responsibilities from umbrella companies to recruitment agencies or end clients. At FutureLink Group, we see this as an opportunity to strengthen partnerships with agencies and clients, ensuring compliance across the labour supply chain.

Shifting PAYE Responsibilities 

• Recruitment Agencies: Agencies supplying workers via umbrella companies will now handle PAYE and NICs.
• End Clients: Where no agency is involved, clients assume these responsibilities.
• Impact for FutureLink Group: We’re ready to support our partners with streamlined processes and expert guidance to meet these new obligations.

Regulatory Framework via the Employment Rights Bill 

• The Employment Rights Bill redefines umbrella companies as employment businesses, placing them under the Fair Work Agency’s (FWA) oversight, replacing the Employment Agency Standards Inspectorate (EAS).
• FutureLink Group welcomes this regulatory clarity, as it aligns with our commitment to transparency and worker protections.
• A consultation on specific regulations is set for autumn 2025, with full implementation by 2027, and we’re actively engaging to shape a fairer market.

How FutureLink Group Protects Workers and Ensures Compliance 

At FutureLink Group, compliance is at the heart of our operations. Our services are designed to protect workers, support compliant businesses, and align with HMRC’s goals to safeguard £2.8 billion in tax revenue by 2030. Here’s how we deliver:

• Transparent Payroll: Clear payslips and accurate tax deductions, verified with HMRC’s Umbrella Company Pay Tool.
• Worker Protections: Full compliance with employment rights, including correct holiday pay and pension contributions.
• Trusted Partnerships: We work closely with agencies and clients to ensure seamless, compliant payroll processes.
• Proactive Compliance: Regular audits and adherence to HMRC guidelines keep us ahead of regulatory changes.

Supporting Tools and Guidance 

• HMRC’s Umbrella Company Pay Tool: We encourage workers to use this tool (updated for 2025/26) to verify their payslips, which align with our transparent processes.
• Stakeholder Engagement: FutureLink Group is participating in the autumn 2025 consultation to advocate for practical, fair regulations.
• Education and Support: We provide resources to help workers avoid tax avoidance schemes and guide agencies through the new PAYE responsibilities.

Implications for Stakeholders

The 2026 legislation impacts recruitment agencies, end clients, and workers, but FutureLink Group is here to ease the transition:

• Recruitment Agencies: Must adapt to PAYE responsibilities, and we offer expert support to simplify compliance and due diligence.
• End Clients: Those engaging umbrella workers directly can rely on our compliant payroll services to avoid liability risks.
• Workers: Partnering with FutureLink Group ensures protection from unexpected tax bills and full employment rights.
• Umbrella Companies: Compliant firms like ours will thrive, while non-compliant operators face increased scrutiny.

Potential Challenges

• Administrative Burden: Agencies and clients may face increased costs, but FutureLink Group’s streamlined services reduce this burden.
• Market Shifts: Some agencies may move to in-house payroll, but our expertise ensures we remain a trusted partner.
• Enforcement Needs: The reforms’ success depends on robust enforcement, which we support through our commitment to compliance.

Conclusion

The UK government’s 2026 legislation is a game-changer for the umbrella company market, tackling non-compliance and protecting workers and taxpayers. At FutureLink Group, we’re proud to lead as a compliant, transparent umbrella company, ready to support agencies, clients, and workers through these changes. By shifting PAYE responsibilities and introducing regulatory oversight via the Employment Rights Bill, the reforms align with our mission to deliver fair, secure payroll services. With our expertise, stakeholders can navigate the new landscape confidently, knowing they’re partnered with a trusted provider.

Partner with FutureLink Group, Your Trusted Umbrella Company

Choose FutureLink Group for compliant, transparent umbrella payroll services that protect your workers and business. Contact us today to learn how we can support your agency or end client with seamless PAYE compliance and worker protections. Visit www.futurelinkgroup.co.uk or reach out to our team to ensure you’re ready for the 2026 reforms. Let’s build a fairer, more secure labour market together.