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effect from April 2026, with the draft legislation included in the Finance Bill 2025 and the Finance Act in the Autumn. As the Government moves forward with these changes, it is wise for engagers to begin preparations by using these top 5 tips: 1. Understand the new legislation : Familiarise yourself with the key changes in the Employment Rights Bill and the Finance Bill 2025. These changes include shifting labour providers such as umbrella companies to recruitment agencies and end clients. 2. Conduct a thorough audit : Review your current labour supply chain. Assess PAYE compliance responsibility from
4. Review and amend current policies and procedures, including monitoring systems : Establish systems to monitor compliance. This includes updating internal policies and procedures around engagement of the labour supply and regular audits and checks of those suppliers to ensure compliance, such as correct tax deductions and workers receiving their full entitlements. 5. Provide training and support : Offer training sessions for hiring managers, HR, and compliance teams to ensure they are fully aware of the new requirements and up to date with the latest case law, for example, where they have undertaken employment status checks.
to safeguard your position and ensure payroll obligations are met within the labour supply chain. Refer to HMRC guidance, particularly the ten checks HMRC recommends businesses should perform. See Help with labour supply chain assurance — GfC12 - Recommended approach to assurance - Guidance - GOV.UK 3. Update contracts and agreements : Consider the risks of entering new contractual arrangements involving labour suppliers, especially for contracts extending beyond March 2026. Review and amend contracts to reflect new compliance responsibilities. Ensure all parties understand their obligations under the new legislation. Contracts should clearly state that all parties must ensure compliance and include comprehensive indemnities if this obligation is not met.
their compliance with existing tax and employment law regulations and readiness for the new legislation. Take proactive steps
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GLOBAL PAYROLL MAGAZINE ISSUE 11
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