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What’s changing in April

​What’s changing in April – and what we’re advising clients to focus on

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From April 2026, a couple of important changes are coming into play.

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First, a tax reform around Joint & Several Liability (JSL) - focused on umbrella companies and how temporary workers are paid.

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Alongside that, Employment Rights Act updates, including changes to Statutory Sick Pay and the introduction of the Fair Work Agency.

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Different areas, but the same impact: more visibility, more accountability - and more focus on who carries the risk.

 

Because this isn’t just about new rules, it’s about whether you can clearly answer:

 

  • Who is employing and paying your workforce?

  • How is that structured?

  • And would it stand up to scrutiny?

And naturally, the questions follow:

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  • Are we exposed?

  • Could this come back on us?

  • Do we need to change how we’re using agencies?

All fair questions, so lets get into the detail

 

Joint & Several Liability - What it actually means

 

From April 2026, new rules come in around Joint & Several Liability (JSL).

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In simple terms:

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…where an umbrella company is used to employ and pay temporary workers, and that umbrella fails to pay the correct PAYE or National Insurance, HMRC will recover that money from another party – the recruitment agency or even the end client.

 

Now, that doesn’t automatically mean the end client is liable, in most standard, well-structured agency models - you won’t be.

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But what it does mean is: How your labour is supplied, and who sits in that chain, matters more than it ever has before.

 

Use this diagram to identify your own liability:

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In the vast majority of cases, where you’re working through a clear, compliant agency model, you’re in a strong position. But there are scenarios where risk starts to creep in:

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  • If you’re contracting directly with an umbrella company

  • If your agency can’t clearly explain their supply chain

  • If there are multiple layers you don’t have visibility on

The more important question isn’t about one supplier - it’s about your overall model:

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  • Do your other agencies use umbrella companies?

  • If they do, do you know which ones?

  • And do you know how those workers are actually being paid?

Because this is where the market is about to shift.

 

What we expect to happen next

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Parts of the labour market currently rely on:

 

  • low-cost umbrella models

  • mini umbrella company (MUC) structures

  • aggressive take-home pay schemes

Under the new rules, these models carry significant risk. Which means:

 

  • some agencies will need to change how they operate

  • supply chains will be cleaned up

  • and those ultra-low rates in the market are unlikely to hold

So what does this mean for you?

 

In simple terms, you don’t need to change everything - but you do need confidence in how your workforce is supplied. That means being able to clearly answer:

 

  • Who is employing our workers?

  • How are they being paid?

  • Who sits between us and them?

  • And are we comfortable with that structure?

Our position (and why it matters)

 

If you’re working with Thorn Baker, there is no scenario where you, as our client, would be liable under these new rules. That comes down to how we structure things:

 

  • Industrial & FM → PAYE only (no umbrella usage)

  • Construction → where umbrella is used, it sits within a compliant, agency-led supply chain

In short: Clear structure, full visibility and no grey areas

 

Statutory Sick Pay - the quieter change that will still hit

 

The second area we’re talking to clients about a lot is Statutory Sick Pay. On paper, it sounds straightforward, in reality, it’s more operational than that.

 

From April 2026:

 

  • SSP will be paid from day one

  • The lower earnings limit is removed

What that means day-to-day

 

More people will qualify, and payments start immediately. So if you’re running:

 

  • high-volume workforces

  • shift-based operations

  • or environments where cover matters

You’ll likely see:

 

  • more people eligible for sick pay

  • more short-term absences becoming a cost

  • more pressure on keeping sites, shifts, or lines covered

This isn’t just a payroll change, it’s a planning and resourcing challenge

 

  • How do you manage cover quickly?

  • How do you maintain productivity during peak absence periods?

  • How do you stop small gaps becoming bigger disruptions?

The businesses that handle this best won’t be reacting when it lands - they’ll already have a flexible workforce model in place.

 

Fair Work Agency - more eyes on how things are done

 

The third area we’re talking to clients about is the introduction of the Fair Work Agency, and this one is important to understand properly, because it’s not just another change in the background. Put simply, it’s a new government body designed to bring together and strengthen enforcement of workplace rights.

 

At the moment, enforcement is split across different organisations, each looking at one part of the picture. The Fair Work Agency brings those together into one joined-up approach.

 

That includes:

 

  • HMRC’s National Minimum Wage enforcement team (checking workers are paid correctly)

  • The Employment Agency Standards Inspectorate (EAS) (regulating recruitment agencies)

  • The Gangmasters & Labour Abuse Authority (GLAA) (focused on labour exploitation and supply chain abuse)

  • The Office for the Director of Labour Market Enforcement (which oversees the strategy across them)

So instead of separate bodies looking at separate issues, this creates one central body, with a full view of how labour is supplied and managed.

 

So what’s actually changing?

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Not necessarily the rules themselves, but how consistently and how visibly they’re enforced.

 

So in practical terms:

 

  • fewer gaps between regulators

  • more coordinated investigations

  • greater ability to look across the full supply chain

What that means for you

 

This isn’t about assuming anything is wrong, it simply means that if something isn’t quite right in how labour is supplied, it’s more likely to be picked up - and it won’t just stop at one point in the chain.

 

So the shift changes:

 

·       from “the agency handles that”

·       to “we understand how this works - and we’re comfortable with it”

 

Because it’s no longer just about being compliant, it’s about being able to demonstrate it clearly if asked

 

What this all comes down to

 

Across all of these changes, the direction is clear:

 

  • More visibility

  • More accountability

  • Less room for grey areas

You don’t need to become an expert in legislation, but you do need confidence that your workforce model would stand up to scrutiny if it needed to.

 

Where Thorn Baker fits

 

Our role in this is simple - to give you that confidence.

 

  • Transparent supply chains

  • PAYE-first models where appropriate

  • Clear processes and audit trails

  • Compliance built into delivery

So if you’re unsure about any part of your current setup, or just want a sense-check before April, let’s have a conversation. No hard sell, just a clear view of where you stand - and whether anything needs tightening up.