Understanding Behavioral Responses to Umbrella Company Legislation

HMRC is seeking external research to evaluate how agencies and end clients will respond to new umbrella company legislation taking effect in April 2026. This legislation transfers PAYE liability from umbrella companies to agencies or end clients to close tax loopholes and reduce fraud risk. While internal administrative data can track compliance responses, HMRC needs qualitative research to understand the 'why' behind business decisions, including whether agencies are improving due diligence processes. The research will explore: (1) business motivations and any unanticipated business model changes resulting from the legislation; (2) qualitative reactions to the policy; (3) the effectiveness of HMRC's education and awareness campaigns in influencing business decision-making; and (4) whether current communications are achieving intended impacts. This externally-commissioned research will provide a comprehensive assessment of the umbrella company sector and identify whether additional policy or compliance interventions are needed to achieve legislative objectives.