Over the past few months, Joint and Several Liability (JSL) has moved from being something quietly discussed to a topic that agencies, clients and payroll providers are actively trying to understand.
For many, the first reaction has been uncertainty.
Questions like “Does this apply to us?”, “Where does the risk actually sit?” and “What does this mean for how we work today?” are coming up more and more.
In this article, we want to look at JSL in practical terms, and not just through a legal lens, but from the perspective of the people and businesses it will affect day to day.
A quick recap: what is Joint and Several Liability?
Joint and Several Liability, at its core, is about shared responsibility.
Rather than placing accountability solely on the party directly paying a worker, JSL allows HMRC to pursue any party in the labour supply chain for unpaid tax or non-compliance.
Put simply, the focus is no longer on individual entities, but on how supply chains are structured, managed and monitored as a whole.
Who does JSL actually affect?
JSL is relevant to:
- Recruitment agencies supplying contingent labour
- End clients engaging workers through agencies or intermediaries
- Payroll providers and umbrella companies operating within supply chains
- Organisations with multi-layered labour arrangements, especially where subcontracting is involved
Even if a business believes they are doing everything right internally, JSL introduces an expectation that due diligence doesn’t stop at your own front door.
That’s not to say that every organisation is suddenly at risk, but it does mean that visibility and oversight matter now more than ever.
Where does the risk sit under JSL?
One of the biggest misconceptions about JSL is that it automatically makes everyone equally liable at all times. And that just isn’t the case.
What JSL really does is give HMRC the ability to look up the supply chain where issues exist and recover unpaid tax from parties that:
- have benefitted financially from the arrangement, or
- failed to take reasonable steps to ensure compliance
The less visibility a business has over how workers are engaged and paid, the harder it becomes to demonstrate that reasonable steps were taken.
From a practical point of view, risk tends to increase where:
- there are multiple intermediaries
- payroll models are unclear or poorly documented
- due diligence is inconsistent or outdated
- responsibility is assumed rather than verified
How is this different from existing rules?
It’s understandable that many people initially compare JSL to previous changes such as IR35. While there are similarities, JSL is not a repeat of those measures, and the key difference is where accountability sits.
Previous reforms focused heavily on employment status and individual determinations. JSL, on the other hand, focuses on financial responsibility across the supply chain. It is less about intent and more about structure, oversight and control.
What should businesses be thinking about now?
In January 2026, the focus doesn’t need to be on wholesale change overnight.
Instead, this is a sensible time to:
- review current labour supply structures
- understand who sits where in the chain
- assess what information is available and what isn’t
- start conversations internally and with key partners
How can Bishopsgate support you?
This article is part of an ongoing series where we’ll continue to break down Joint and Several Liability in a way that’s practical, clear and grounded in real-world experience.
Over the coming months, we’ll explore how businesses can reduce risk in a measured way, common pitfalls we’re already seeing and how compliant, transparent payroll structures support confidence under JSL.
Change doesn’t need to feel overwhelming, especially when it’s approached with clarity and the right support.
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