The Social Security Contributions (Umbrella Companies) Regulations 2026

• Citation: S.I. 2026/388
• Sections: 9

Section 1 Citation and commencement

These Regulations may be cited as the Social Security Contributions (Umbrella Companies) Regulations 2026 and come into force on 6th April 2026.

Section 2 Interpretation

(1) In these Regulations—

“ arrangements ” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

“ the client ” has the meaning given in regulation 3(1)(a);

“ the deemed employer provisions ” means—

paragraph 2 of Part 1 of Schedule 1 to the Social Security (Categorisation of Earners) Regulations 1978 ,

paragraph 2 of Part 1 of Schedule 1 to the Social Security (Categorisation of Earners) (Northern Ireland) Regulations 1978 ,

regulations 6 and 18 of the Social Security Contributions (Intermediaries) Regulations 2000 ,

regulations 6 and 18 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000 ,

regulations 3 and 4 of the Social Security Contributions (Managed Service Companies) Regulations 2007 , and

regulations 3 and 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014 ;

“ material interest ” has the meaning given by section 61Y(5) of ITEPA 2003 ;

“ purported umbrella company ” has the meaning given by regulation 5(2) to (4), as the case may be;

“ qualifying umbrella company payment ” means a payment made in respect of the employment of a worker as an employed earner to the extent that it is not in respect of the provision of services to a person other than the client;

“ relevant party ” has the meaning given by regulation 4;

“ SSCBA ” means the Social Security Contributions and Benefits Act 1992;

“ umbrella company ” has the meaning given by regulation 3(1)(b);

“ the umbrella company arrangements conditions ” means the conditions set out in regulation 3(3);

“ worker ” has the meaning given in regulation 3(1)(a).

(2) In these Regulations references to an individual being employed as an employed earner do not include the individual being treated as an employed earner as a result of any of the deemed employer provisions, and “employment” and “ employer ”, in relation to an employed earner, are to be construed accordingly.

(3) In the application of regulations 3 to 5 to Northern Ireland a reference to an enactment or instrument made under an enactment applying to Great Britain is to be read as a reference to the corresponding enactment or instrument made under an enactment applying in Northern Ireland.

Section 3 Umbrella companies: joint and several liability

(1) Paragraph (2) applies if—

(a) an individual (“the worker”) personally provides services, or enters into arrangements with a view to personally providing services, to another person (“ the client ”),

(b) the worker is employed as an employed earner by a third person (the “umbrella company”)—

(i) that carries on a business, whether or not with a view to profit and whether or not in conjunction with any other business, of supplying labour, and

(ii) that is not a company in which the worker has a material interest, and

(c) the umbrella company arrangements conditions are met.

(2) Each relevant party—

(a) is, along with the umbrella company, jointly and severally liable to pay any amount payable, in accordance with sections 6, 10 and 10A of and paragraph 3 of Schedule 1 to the SSCBA , by the umbrella company in relation to a qualifying umbrella company payment, but

(b) is not to be treated as the secondary contributor for the purposes of section 7 of the SSCBA .

(3) The umbrella company arrangements conditions are that—

(a) there is a contract between the umbrella company and—

(i) the client, or

(ii) another person,

(b) under or in consequence of the contract—

(i) the services are provided, or

(ii) the umbrella company is paid, or otherwise provided with consideration, for the services, and

(c) if the contract is not between the umbrella company and the client—

(i) there is a contract between the client and another person, and

(ii) the provision of the services or of payment or other consideration for the services is also a consequence of that other contract, whether directly or as a result of a series of contracts involving other persons.

(4) Any issue whether the circumstances are such as are mentioned in paragraph (1) is an issue relating to contributions that is prescribed for the purposes of section 8(1)(m) of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (decision by officers of Board).

Section 4 Relevant Parties

(1) If the contract referred to in regulation 3(3)(a) is between the umbrella company and a person other than the client, the person referred to in regulation 3(3)(c)(i) is a relevant party.

(2) The client is a relevant party if—

(a) the contract referred to in regulation 3(3)(a) is between the umbrella company and the client, or

(b) the person referred to in regulation 3(3)(c)(i)—

(i) is connected, within the meaning of section 993 of the Income Tax Act 2007 (meaning of “connected” persons) , with the umbrella company, or

(ii) is not resident in the United Kingdom.

(3) In a case where—

(a) both the client and the person referred to in paragraph (3)(c)(i) of regulation 3 are not resident in the United Kingdom,

(b) the provision of the services or payment or other consideration for the services is a consequence of a series of contracts involving other persons, other than the worker, and

(c) at least one of those persons is resident in the United Kingdom,

the person who is resident in the United Kingdom and is closest, by reference to that series of contracts, to the client is a relevant party.

Section 5 Purported umbrella companies

(1) Paragraph (5) applies if any of the following cases applies.

(2) Case 1 is that—

(a) a person (“the purported umbrella company”) participates in arrangements that would, if an individual were employed as an employed earner by the purported umbrella company, result in the umbrella company arrangements conditions being met in relation to services the individual provides to the client,

(b) either—

(i) it is reasonable to suppose that one or more participants in the arrangements, other than the purported umbrella company or the individual, would assume that the purported umbrella company is the employer of that individual, or

(ii) the purported umbrella company has taken any step that it is reasonable to suppose was intended to give the impression to any person, whether or not that impression is given, that the purported umbrella company is the employer of the individual,

(c) the individual is not employed as an employed earner by the purported umbrella company, and

(d) if the individual were employed as an employed earner by the purported umbrella company, regulation 3(2) would apply.

(3) Case 2 is that—

(a) a person (“the purported umbrella company”) participates in arrangements that would, if an individual were employed as an employed earner by the purported umbrella company, result in the umbrella company arrangements conditions being met in relation to services the individual provides to the client,

(b) the individual would, ignoring this regulation, be treated as employed as an employed earner by the purported umbrella company as a result of paragraph 2 of Part 1 of Schedule 1 to the Social Security (Categorisation of Earners) Regulations 1978,

(c) if the individual were employed as an employed earner by the purported umbrella company, regulation 3(2) would apply,

(d) if it did apply accordingly, the contract referred to in regulation 3(3)(a) would be between the umbrella company and the client, and

(e) the provision of the services by the individual to the client was not as a result of services having been provided to the individual in connection with finding the client with a view to the individual personally providing services to the client—

(i) by the purported umbrella company, or

(ii) where the provision of services to the client is as a result of a series of contracts, by one or more of the parties to those contracts.

(4) Case 3 is that—

(a) a company (“the purported umbrella company”) in which an individual has a material interest participates in arrangements that would, if the company were the umbrella company, result in the umbrella company arrangements conditions being met in relation to services the individual provides to the client,

(b) either—

(i) it is reasonable to suppose that one or more participants in the arrangements, other than the purported umbrella company or the individual, would assume that a substantial proportion of amounts provided to the purported umbrella company in respect of the services will be paid to the individual as earnings derived from the individual’s employment as an employed earner, or

(ii) the purported umbrella company has taken any step that it is reasonable to suppose was intended to give the impression to any person, whether or not that impression is given, that a substantial proportion of amounts provided to the purported umbrella company in respect of the services will be paid to the individual as earnings derived from the individual’s employment as an employed earner,

(c) it is not the case that a substantial proportion of amounts provided to the purported umbrella company in respect of the services is paid to the individual as earnings derived from the individual’s employment as an employed earner, and

(d) regulation 3(2) would apply if the requirement in regulation 3(1)(b)(ii) were omitted.

(5) If this paragraph applies—

(a) the individual is to be treated, for the purposes of Parts 1 to 5 of the SSCBA, as employed as an employed earner by the purported umbrella company, the duties of which consist of the services the individual provides to the client,

(b) all relevant remuneration is to be treated as earnings derived from that employed earner’s employment for those purposes,

(c) the purported umbrella company is to be treated for those purposes as the secondary contributor in respect of the relevant remuneration,

(d) where there is any provision of relevant remuneration, by any person and to any person, that does not result, whether as a direct result of that provision, as a result of the onward provision of that remuneration or otherwise, in the payment of earnings derived from an employed earner’s employment of that remuneration, or any part of it, to the individual, the purported umbrella company is treated as making, and the individual is treated as receiving—

(i) a payment of earnings derived from an employed earner’s employment in the relevant amount made at the time it was provided for the purposes of Parts 1 to 5 of the SSCBA, and

(ii) a qualifying umbrella company payment made in the relevant amount at that time,

(e) the deemed employer provisions do not apply in relation to the provision of those services, and

(f) accordingly, regulation 3(2) will apply in relation to the purported umbrella company.

(6) For the purposes of paragraph (5)—

(a) in sub-paragraph (d) the “ relevant amount ” means so much of the remuneration provided as does not result in the payment of earnings derived from the individual’s employment as an employed earner, and

(b) sub-paragraph (d) only applies in relation to the initial provision of an amount of relevant remuneration and not to any subsequent onward provision of the same amount.

(7) If paragraph (5) would, ignoring this paragraph, apply in relation to more than one purported umbrella company in relation to services the individual provides to the client, paragraph (5) only applies in relation to the purported umbrella company that—

(a) is a person to whom the provisions in Parts 1 to 5 of the SSCBA apply, and is closest to the individual, by reference to the contract or series of contracts resulting in the provision of those services, or

(b) if none of the purported umbrella companies is a person to whom Parts 1 to 5 of the SSCBA apply, is closest to the individual by reference to that contract or those contracts.

(8) Where paragraph (5) applies and there is a person who is an umbrella company in relation to the services the individual provides to the client, that paragraph has effect as if—

(a) sub-paragraph (a) were omitted,

(b) in sub-paragraph (b), the reference to that employed earner’s employment were to the employed earner’s employment of the individual by the umbrella company,

(c) in paragraph (d), the reference to the purported umbrella company were to the umbrella company, and

(d) paragraph (f) were omitted.

(9) Paragraph (10) applies where paragraph (5) applies and there is more than one person who—

(a) is an umbrella company in relation to services the individual provides to the client, or

(b) is a purported umbrella company in relation to those services, including a purported umbrella company in relation to which paragraph (5) does not apply as a result of paragraph (7).

(10) Where this paragraph applies, each of the persons falling within paragraphs (9)(a) or (b), whether or not they fulfil the conditions prescribed under section 1(6)(a) of the SSCBA, is, to the extent this would not otherwise be the case, jointly and severally liable to pay any amount payable under sections 6, 10 and 10A of, and paragraph 3 of Schedule 1 to, the SSCBA, in relation to the relevant remuneration.

(11) For the purposes of this regulation “ relevant remuneration ” means—

(a) all remuneration receivable by the individual, from any person, in consequence of providing the services, and

(b) any other amount that it is just and reasonable to attribute to provision of the services by the individual, for example, any amounts that would form a part of any earnings derived from that employed earner’s employment if any of the deemed employer provisions applied.

(12) Any issue whether the circumstances are such as are mentioned in paragraphs (2), (3) or (4) is an issue relating to contributions that is prescribed for the purposes of section 8(1)(m) of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (decision by officers of Board).

Section 6 Amendment of the Social Security (Categorisations of Earners) Regulations 1978

(1) The Social Security (Categorisation of Earners) Regulations 1978 are amended as follows.

(2) In regulation 1(2) at the appropriate place insert—

“ foreign purported umbrella company ” in paragraph 9 of Schedule 3 to these Regulations means a purported umbrella company, to whom regulation 5(5) of the Social Security (Umbrella Companies) Regulations 2026 applies and who does not have a place of business, residence or presence in Great Britain;

(3) In the Table in Schedule 3—

(a) after paragraph (9)(f) of Column (A) insert—

(g) under or in consequence of a contract between a foreign purported umbrella company and an end client where the worker provides services to that end client; or

(h) under or in consequence of a contract between a foreign purported umbrella company and a UK agency , where the worker provides services to an end client.

(b) in Column (B)—

(i) in paragraph 2(a), for “; or” substitute “.” ;

(ii) omit paragraph 2(b);

(iii) after paragraph 9(h), insert—

(i) employment within paragraph 9(g) of column (A), the end client; or

(j) employment within paragraph 9(h) of column (A), the UK agency who has a contractual relationship with the end client.

Section 7 Amendment of the Social Security (Categorisation of Earners) Regulations (Northern Ireland) 1978

(1) The Social Security (Categorisation of Earners) Regulations (Northern Ireland) 1978 are amended as follows.

(2) In regulation 1(2) at the appropriate place insert—

“ foreign purported umbrella company ” in paragraph 7 of Schedule 3 to these Regulations means a purported umbrella company, to whom regulation 5(5) of the Social Security (Umbrella Companies) Regulations 2026 applies and who does not have a place of business, residence or presence in Northern Ireland;

(3) In the Table in Schedule 3—

(a) after paragraph (7)(f) of Column (A) insert—

(g) under or in consequence of a contract between a foreign purported umbrella company and an end client where the worker provides services to that end client; or

(h) under or in consequence of a contract between a foreign purported umbrella company and a UK agency where the worker provides services to an end client.

(b) in Column (B)—

(i) in paragraph 2(a), for “; or” substitute “.” ;

(ii) omit paragraph 2(b);

(iii) after paragraph 7(h), insert—

(i) employment within paragraph 7(g) of column (A), the end client; or

(j) employment within paragraph 7(h) of column (A), the UK agency who has a contractual relationship with the end client.

Section 8 Amendment of the Social Security Contributions (Intermediaries) Regulations 2000

In regulation 22 of the Social Security Contributions (Intermediaries) Regulations 2000, after paragraph (4) insert—

(4A) But where the fraudulent documentation condition would, ignoring this paragraph, be met as a result of the provision of a fraudulent document intended to constitute evidence that regulation 3 of the Social Security Contributions (Umbrella Companies) Regulations 2026 applies in relation to the services provided by the worker, that condition is to be treated as not met.

Section 9 Amendment of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000

In regulation 22 of the Social Security (Intermediaries) (Northern Ireland) Regulations 2000, after paragraph (4) insert—

(4A) But where the fraudulent documentation condition would, ignoring this paragraph, be met as a result of the provision of a fraudulent document intended to constitute evidence that regulation 3 of the Social Security Contributions (Umbrella Companies) Regulations 2026 applies in relation to the services provided by the worker, that condition is to be treated as not met.