Umbrella PAYE chain exposure for UK agencies, 2026-27

A UK recruitment agency supplying 45 umbrella workers is carrying 44014.43 of PAYE and National Insurance that HMRC can now collect from it directly, plus 785.02 of interest on top. That is not a forecast. It is what this extension returns on its own default chain, and every figure below comes out of the same seven inputs.

Until 5 April 2026 the answer to “who owes the PAYE on an umbrella worker” was simple: the umbrella company. It ran the payroll, and if it did not pay HMRC, that was its debt. From 6 April 2026 responsibility for operating PAYE on umbrella worker pay sits with the recruitment agency that supplies the worker, or with the end client where there is no agency in the chain. The umbrella and that party are jointly and severally liable, so HMRC can recover the entire shortfall from whichever one is easier to reach. There is no reasonable-care defence and no knowledge test.

Ask any chatbot today who owes the PAYE and it will still say the umbrella. Twenty years of training data says so. The rule changed 168 days ago.

The arithmetic is the second thing agencies get wrong, and it is the more expensive one. An agency looks at a 950 assignment rate and thinks of it as the worker's pay. It is not. Out of that 950 the umbrella takes its margin — 25 on this chain — leaving 925. From that 925 it has to fund employer National Insurance at 15 percent on everything above the 96 weekly secondary threshold, and the apprenticeship levy at 0.5 percent if the paybill is over 3000000. Only what survives is taxable gross pay, and on these numbers that is 813.33.

From 813.33 the statutory deductions follow. Employee National Insurance runs at 8 percent between the 242 primary threshold and the 967 upper earnings limit. Income tax runs at 20 percent on everything above the 241.73 weekly personal allowance, inside a 725 weekly basic rate band. Put the employer NIC and the levy back alongside them and 271.69 per worker per week has to arrive at HMRC.

Multiply 271.69 by 45 workers and 24 weeks of pay and the chain owes HMRC 293429.52. Now assume the umbrella is remitting 85 percent of it and keeping the rest. The missing 15 percent is 44014.43, and under the 2026 rule that is the agency's debt as much as the umbrella's. Late payment interest at 7.75 percent — the rate in force from 2026-01-09, which is the Bank of England base rate plus four percentage points — adds 785.02 across the 168 days since 2026-04-06. The total is 44799.45.

Change the chain and the answer moves properly. Twelve IT contractors at a 1450 assignment rate over a full 52 weeks, no levy, with a 40 percent shortfall: taxable gross of 1247.30, 493.53 a week to HMRC, 307963.64 across the chain, 123185.46 of exposure and 126703.41 with interest. Eight workers at 620 over 12 weeks with a 5 percent shortfall: 534.26 gross, 147.63 a week, 708.61 of exposure, 715 all in. Same seven inputs, same seven outputs, three different answers.

The extension runs entirely in the browser; the only outbound call it makes is licence key validation. The full figure is free and uncapped — no watermark, no trial count, no blurred result. The paid key sits on a different axis: it exports the chain and the inputs behind it to a dated CSV for your due diligence file, and sets a quarterly alarm to re-run the same chain, because the HMRC interest rate tracks the base rate and will not sit at 7.75 percent forever.

A UK chartered accountant charges 75 to 150 an hour, and a supply chain review is not a one hour job.