When you’ve spent more than a decade working across recruitment, contracting and payroll compliance, you develop a rare view of how money really moves through the supply chain. That’s exactly what Adam Jordan, Founder of SupplyIN2, brings to the table. As a long-standing expert in contractor payroll and compliance, Adam has seen the good, the bad and the decidedly murky sides of the umbrella company world.
So we asked him to join us and unpack what’s changing in payroll, why so many construction firms are about to face new compliance pressures in April 2026 and what both contractors and businesses can do to stay ahead.
The Umbrella Company Landscape Today
In construction, most labour-only subbies work under CIS as sole traders. But when agencies get involved, or when workers aren’t set up for CIS, umbrella companies often enter the picture. The umbrella becomes the worker’s official employer, handling PAYE, tax, and National Insurance. It’s supposed to simplify things for businesses that can’t use CIS and ensure workers are paid correctly without the client managing complex payroll. .
But the model has been exploited. Some umbrellas have used questionable practices around matters such as expenses, margins and holiday pay. While this primarily affects PAYE workers rather than CIS subbies, the broader issue is relevant: if you’re using any payroll intermediary, you need to understand how they operate. HMRC has taken notice, and accountability is moving up the chain. .
HMRC has taken notice. Following years of abuse and confusion the government has now tightened the rules. And for the first time, the accountability for getting it wrong won’t just sit with the umbrella company. It’s coming right back up the chain.
Adam’s Key Insights
From April 2026 legislation will fundamentally change how payroll risk is managed. Under the new rules, if an umbrella company fails to operate compliantly – say, by underpaying tax or misclassifying a worker – the end client or recruitment agency could be held financially responsible.
Liability is moving upstream and the days of saying ‘that’s the umbrella’s problem’ are over. If you’re a construction firm engaging contractors, you’ll need to prove your supply chain is watertight.
That shift will reshape the market. Non-compliant providers will likely disappear, while those with transparent, ethical practices and proper accreditation through bodies like the FCSA or Professional Passport will thrive. But even accreditation, Adam cautions, isn’t a guarantee. Some companies see the badge as a marketing tool, not a compliance framework. You still need to do your own checks.
He also highlighted technology as a key driver of change. Automation and digital compliance tools are helping firms monitor payroll flows, verify workers’ tax status and track liabilities in real time. Tech won’t replace compliance, but it can make it visible. And that visibility is what HMRC expects.
The coming regulation is not just about tightening control. It’s about forcing a culture shift. Transparency, due diligence and accountability will become the new hallmarks of professionalism in payroll.
Red Flags for Contractors and Businesses
For construction firms, the stakes are high from April 2026.Ignorance will no longer be a defence. It will be essential to audit every part of your payroll supply chain, verify how umbrella partners operate and document your due diligence. Adam’s advice is to treat payroll compliance the same way you’d treat site safety: as a shared responsibility that demands constant vigilance.
He warns that some of the biggest risks hide in plain sight. Rebates or “kickbacks” from payroll providers to agencies might look like commercial perks but can easily cross the line into non-compliance. So can inconsistent or unclear payslips. If you can’t explain your own payroll structure in one sentence, that’s a problem waiting to happen.
The good news? The firms that embrace transparency now will be in a stronger position when the rules take effect. Clients and workers alike are starting to value ethical practice and visible compliance as part of what makes a good employer.
Building Trust Through Compliance
At HardHats, we’ve seen firsthand how confusion around umbrellas can undermine even the most reputable construction businesses. That’s why we’re helping clients get ahead of the curve: reviewing contracts, checking supply chains, and advising on best practice before 2026 arrives.
The lesson from Adam Jordan is clear: the future of contracting will belong to those who take compliance seriously, not because they have to, but because it builds trust. Payroll transparency isn’t just a regulatory requirement. It’s a marker of integrity, professionalism and respect for the workforce that keeps the industry moving.
If you want to make sure your business is ready for the upcoming changes, or simply want a second opinion on your current payroll arrangements, get in touch with HardHats. We’ll help you cut through the jargon, understand your risks and build a compliant framework that stands up to scrutiny.