The PAYE Burden Is Moving Up the Chain—Is Your Agency Ready?

One of the biggest proposed changes on the horizon? Transferring full PAYE responsibility to recruitment agencies—even when engaging workers through umbrella companies.

This echoes the Off-Payroll reform—and if you’ve been through that, you’ll know it’s no small shift.

As Chris Fahey, CEO of AGPayroll, puts it:

“Agencies can no longer assume the payroll piece is someone else’s problem. It’s on you—and you need the right processes, tech, and partners to manage that risk.”

Why it matters

Under the proposed changes, if your umbrella partner doesn’t correctly process tax or NICs, you could be on the hook. Not just reputationally—but financially.

That means:

• Your PSL needs more than a basic check—it needs to be robustly validated.

• You need clear audit trails, proper HMRC reporting, and real-time visibility over deductions.

What’s unclear (but urgent)

There are still open questions:

• Will liability ever extend to end clients?

• How will PAYE be tracked across workers with multiple assignments?

• What protections will be in place for agencies that do their due diligence?

While we wait for clarity, there’s one thing you can do: get your house in order now.

AGPayroll’s fully integrated system was built for this. Our clients receive monthly SafeRec reports and benefit from real-time HMRC gateway syncing, meaning full transparency over every deduction and every payment.

It’s not about ticking boxes—it’s about knowing you’re protected.