2026 will undoubtedly be a significant year for the temporary labour sector. The year will be defined by two legislative pillars that represent a fundamental shift in how we manage supply chain risk: the Finance Bill 2026 and the Employment Rights Act 2025.

At Champion Contractors, we are committed to navigating these changes alongside our partners with absolute integrity.

The Finance Bill: Umbrella Compliance & Liability

The most immediate priority for our agency partners is the introduction of Joint and Several Liability (JSL). As outlined in the Finance Bill, recruitment agencies and, in some cases, end clients will be held financially responsible if an umbrella company fails to account for PAYE and National Insurance correctly.

• The Change: From 6 April 2026, if an umbrella company fails to pay the correct Pay As You Earn (PAYE) or National Insurance Contributions (NICs), HMRC can legally pursue the recruitment agency (specifically the one with the direct contract with the end-user client) for the full debt.
• Strict Liability: Crucially, this is a "strict liability" regime, meaning there will be no statutory defence for agencies or end clients. Even where due diligence is conducted, they will remain liable if the umbrella company defaults on its tax obligations.
• End-User Liability: If there is no UK recruitment agency in the chain, or if the agency is "connected" to the umbrella company, the end-client becomes the party liable for the unpaid tax.

The Finance Bill: Current Status

• Stage: The legislation is currently under debate in the House of Commons. It was published in the Finance (No. 2) Bill in December 2025.
• Next Steps: The Bill must pass its Third Reading in the Commons and a formal (usually brief) review in the House of Lords before receiving Royal Assent in March 2026.

The Employment Rights Act: Phased Implementation

While the Finance Bill addresses tax and liability, the implementation of the Employment Rights Act (formerly the Employment Rights Bill) will redefine worker protections throughout 2026.

• Key Milestones: Throughout the year, we expect the phased rollout of "Day 1" rights, including reforms to Statutory Sick Pay and parental leave.
• Structural Changes: The launch of the Fair Work Agency will centralise enforcement and the upholding of industry standards.
• Business as Usual: While new legislation can feel daunting, the Champion team is here to ensure it remains "business as usual" for you.

The Employment Rights Act: Current Status

• Stage: Became the Employment Rights Act 2025 after receiving Royal Assent on the 18th of December 2025. The government is issuing Statutory Instruments (secondary legislation) to activate specific sections of the Act.
• The "Fair Work Agency": This new enforcement body is scheduled to begin its initial operations in April 2026, coinciding with the new tax year. It will eventually oversee holiday pay compliance and the regulation of umbrella companies (set for further expansion in 2027).

Ensuring a Successful and Compliant 2026

At Champion Contractors, we view these legislative milestones as an opportunity to reinforce the high standards we have always advocated. We've been working hard behind the scenes in 2025 and are confident we are well prepared for the changes ahead. As an established, accredited, and trusted umbrella company, Champion ensures your contractors are supported and your business is protected.

For expert guidance on securing your supply chain, contact us at 0161 703 2549 or email info@championcontractors.co.uk.