What Joint and Several Liability (JSL) means for life sciences businesses

As UK life sciences organisations expand, whether scaling R&D functions, strengthening clinical operations or building capacity, the compliance risks linked to umbrella companies are becoming increasingly significant. HMRC has identified widespread misuse of umbrella structures and new UK legislation will increase liability across the supply chain.

From April 2026, the introduction of Joint and Several Liability (JSL) will hold organisations accountable for unpaid PAYE and National Insurance (NI) arising from non-compliant umbrella companies, even if they did not select or contract those providers directly.

This guide outlines what JSL means for your business, the risks posed by fraudulent umbrella companies and how Proclinical protects UK organisations as they scale.

Why umbrella company compliance matters for growing UK organisations

Many life sciences organisations use a mix of permanent staff, temporary workers and contractors to support R&D, manufacturing, clinical programmes and operational delivery. While contractors are often the most directly affected by umbrella company misconduct, non-compliance anywhere in the chain can create serious financial and operational risk for the employer.

The UK umbrella market has already shown significant compliance failures. Between 2022 and 2023, at least 275,000 flexible workers used umbrella companies that did not meet their tax obligations. In December 2024, the High Court issued an interim order against Ducas Limited (Maxipay) following allegations of £171m in unpaid employer national insurance contributions, demonstrating the scale and impact of fraud in the market.

For organisations growing their teams, particularly those scaling quickly or relying on blended workforce models, even indirect links to a fraudulent umbrella company can result in financial, operational and reputational consequences.

What is Joint and Several Liability (JSL)?

Starting in April 2026, UK legislation will enable HMRC to recover unpaid PAYE and NI from any party in the labour supply chain if the umbrella company responsible fails to operate PAYE correctly. This includes:

• The recruitment agency

• Other intermediaries

• Potentially the end client, depending on supply chain structure

This applies even if the organisation had no direct relationship with the umbrella company.

What this means for your organisation

If your business is expanding and adding workers, you could still be held liable for:

• Unpaid tax and NI

• Penalties and interest

• Reputational harm linked to non-compliance

• Supply chain investigations

For life sciences businesses working in highly regulated environments, the impact of this legislation is especially significant.

Risks to contractors and why that matters to your growth plans

When workers are drawn into noncompliant umbrella arrangements, they can end up facing unexpected tax bills, penalties or backdated assessments if HMRC later identifies that a tax avoidance scheme was involved. Understandably, this creates a huge amount of stress for the individual and can lead to distraction, reduced engagement or, in some cases, contractors leaving assignments altogether while they try to resolve the issue.

In life sciences, where programmes depend on specialist expertise and continuity, this kind of disruption has a direct impact. Losing key individuals or having their focus affected can slow clinical progress, delay regulatory activity, interrupt manufacturing output or affect commercial and medical delivery. Growing organisations simply can’t afford interruptions like these.

Risks to UK life sciences organisations

1. Financial liability under JSL

Your organisation could be required to pay unpaid PAYE and NI arising from non-compliant umbrella companies in your supply chain.

2. Legal and compliance exposure

Under the UK Criminal Finances Act, organisations may be liable for failing to prevent tax evasion, even unintentionally.

3. Reputational damage

Being associated with non-compliant payroll practices can impact investor confidence, regulator trust and employer brand.

4. Operational disruption

Payroll failures can lead to worker dissatisfaction, assignment dropout and delays that affect productivity, timelines and cost.

These risks are magnified for organisations rapidly expanding or reliant on workforce models that include contractors or temporary workers.

How Proclinical protects your organisation as you grow

Proclinical supports UK life sciences organisations with a high‑integrity workforce engagement model built around compliance, transparency and risk reduction. Our approach gives growing businesses confidence that their contractor supply chain is being managed safely and consistently.

1. A fully vetted umbrella panel

We work exclusively with umbrella partners that meet the highest compliance standards, including:

• FCSA accreditation

• SafeRec real‑time payroll auditing

Any umbrella that loses accreditation or fails ongoing checks is immediately removed, giving you peace of mind that your workers are being paid through safe and compliant providers.

2. Ongoing, proactive compliance monitoring

Our compliance team continually reviews the supply chain through:

• Regular audits

• Accreditation and status tracking

• PAYE and NI accuracy checks

• Continuous risk monitoring

This proactive approach significantly reduces your exposure under JSL and ensures compliance isn’t just checked at onboarding but maintained throughout the assignment.

3. Full supply chain transparency and governance

We give you clear visibility over:

• Which umbrella companies are being used

• Where PAYE and NI responsibility sits

• The protections built into contracts

• How compliance is monitored end-to-end

This means you retain full oversight of your contractor landscape without taking on the day‑to‑day administrative burden.

4. Reduced liability as your workforce scales

By engaging workers through Proclinical, you gain an additional layer of protection. We manage contractor compliance and supplier governance on your behalf, helping you grow with confidence and avoid unnecessary financial or operational risk linked to JSL.

How UK businesses can safeguard themselves now

If your organisation is planning to grow its workforce, whether through permanent hires or contractors, we recommend:

• Using only accredited umbrella companies

• Working with staffing partners that conduct continuous compliance checks

• Reviewing agency and umbrella agreements for audit rights and clarity

• Educating internal teams about JSL and its implications

• Carrying out regular supply chain reviews and risk assessments

Taking these steps now will help ensure you are prepared for the 2026 legislation and protected against current umbrella related risks.

Scale safely with Proclinical

As UK life sciences organisations grow, safeguarding your supply chain becomes essential. Proclinical provides the compliance expertise, accredited umbrella partners and ongoing monitoring needed to protect your business, your workforce and your reputation under JSL and beyond.

Want to learn more about how we can support you? Get in touch today