From April 2026, a major shift in HMRC legislation will fundamentally change how risk is managed across labour supply chains. For logistics operators, distribution centres, and businesses relying on outsourced security, cleaning, or warehouse labour, this is not a minor update. It is a direct compliance risk that needs immediate attention.
HMRC is introducing new rules targeting umbrella company arrangements and non-compliant payroll practices.
Under the new legislation:
Responsibility for PAYE and National Insurance will no longer sit solely with the umbrella company
Liability can move up the supply chain to recruitment agencies and, in some cases, the end client
HMRC will be able to recover unpaid tax directly from those higher in the chain if non-compliance is found (GOV.UK)
This is commonly referred to as “joint and several liability”, and it represents a significant shift in accountability.
Historically, many organisations relied on agencies or umbrella providers to manage payroll compliance.
From April 2026, that is no longer enough.
Even if you are not directly employing workers:
You may still be financially liable for unpaid tax
Lack of awareness is not a valid defence
You are expected to carry out due diligence across your supply chain
In practical terms, this means that choosing the wrong labour provider could expose your business to:
Unexpected tax liabilities
HMRC penalties and interest
Reputational damage
Operational disruption
The risk of non-compliant contractors
HMRC’s reforms are driven by long-standing issues in parts of the labour market, including:
While many providers operate correctly, a minority do not. Under the new rules, the consequences of using those providers will no longer sit with them alone.
They will sit with you.
The 2026 changes place a clear expectation on organisations to actively manage compliance.
This includes:
Understanding who supplies your workforce
Verifying how workers are paid
Ensing PAYE is correctly applied
Auditing labour providers regularly
Working only with transparent, compliant partners
Sectors that rely heavily on temporary or outsourced labour are particularly exposed.
This includes:
Security teams protecting sites and assets
Cleaning teams maintaining safe environments
Warehouse labour supporting peak demand
These roles are often supplied through layered labour chains, which increases the risk of hidden non-compliance.
From April 2026, every link in that chain matters.
While the legislation introduces risk, it also creates an opportunity.
Businesses that take action now can:
Strengthen supply chain transparency
Reduce exposure to tax and compliance issues
Improve operational reliability
Protect their reputation and workforce
Those that do not may face avoidable financial and legal consequences.
At Circle UK Group we support logistics clients with fully compliant workforce solutions, including:
• Security personnel for gatehouses, yard patrols and loss prevention
• Cleaning teams maintaining safe and compliant warehouse environments
• Warehouse labour support for peak periods and operational cover
Our focus is simple: protect your business from risk while keeping your operations running smoothly.
"Our approach focuses on direct PAYE staffing and vetted labour providers, ensuring a clear and compliant supply chain that protects our clients from operational and compliance risk." Benita Hajdas General Manger at Circle UK Group