Question 1

What is strict liability and how is it different from the current rules?

Accepted Answer

Currently, if an umbrella in your supply chain doesn't pay their tax, you might be able to defend yourself by showing you did 'reasonable due diligence'. From 6 April 2026, that defence disappears. Under strict liability, if the umbrella doesn't pay, you're liable — regardless of what checks you did. The only protection is to ensure the tax is actually paid, or to verify the entities before you engage them.

Question 2

How much could I actually be liable for?

Accepted Answer

It depends on your workforce size and pay rates. As a rough guide: 50 workers could mean £400K-£1.9M annual exposure. 500 workers: £4M-£19M. 3,000 workers: £24M-£112M. And HMRC can look back up to 20 years for deliberate fraud under Regulation 80. Even if only 10% of your supply chain is non-compliant, that's still a significant liability.

Question 3

I only use certified umbrellas. Am I protected?

Accepted Answer

Partially. Certification and accreditation typically verify that taxes are calculated correctly and paid to HMRC — that's Layer 2 of the protection you need. But who verifies the ORGANISATION before you send money? That's Layer 1. If your 'umbrella' is actually a network of 500 shell companies (MUCs), you inherit their debt even if their paperwork looks perfect. Diligens and services like SafeRec work best together — we forensically verify the organisations, they verify the taxes.

Question 4

What's the difference between an umbrella and a 'purported umbrella'?

Accepted Answer

A legitimate umbrella employs workers and handles their PAYE correctly. A 'purported umbrella' (as defined in the 2026 legislation) is an entity that appears to be an umbrella but doesn't actually employ workers properly. HMRC uses a 'duck test' — if it walks like an umbrella and quacks like an umbrella, it's treated as one for liability purposes. This catches fraudsters who rebrand their schemes as 'fintech platforms' or 'management consultancies'.

Question 5

How does the Joint & Several Liability legislation affect me?

Accepted Answer

Under Section 61Y of the Finance Bill 2026, if an umbrella company fails to pay PAYE/NICs, HMRC can pursue the 'relevant party' — which in most supply chains is the recruitment agency. The debt transfers automatically when the umbrella is dissolved, liquidated, or fails to pay within 30 days. There's no need for HMRC to prove you 'knowingly facilitated' anything. You're liable simply by being in the chain.

Question 6

What are the 2 layers of protection I need?

Accepted Answer

Based on HMRC guidance and industry legal advice, you need two layers of protection. Layer 1: Organisation Verification — forensically verify who employs the worker, their directors, ownership structures, physical locations, and supply chain patterns. This is what Diligens does. Layer 2: Tax Verification — confirm taxes are calculated correctly, disclosed via RTI, and paid to HMRC in real-time. This is what tax verification services like SafeRec do. Under strict liability, you need both layers — neither alone provides complete protection.

Question 7

How do I spot a Mini-Umbrella Company (MUC) scheme?

Accepted Answer

Red flags include: Directors running 100+ 'separate' companies simultaneously. Dozens of companies registered at the same residential address. Phoenix patterns — directors whose previous companies folded owing tax. Companies registered as 'management consultancies' but actually supplying labour. UK companies controlled entirely by offshore directors. Companies that were dormant for years then suddenly 'reactivated'. Diligens checks for all of these automatically.

Question 8

Is FCSA/Professional Passport accreditation enough?

Accepted Answer

No. Accreditation shows a provider's intent to be compliant, but HMRC has stated agencies must perform their own independent due diligence. More importantly, accreditation audits the brand/promoter — not necessarily the underlying entities actually employing your workers. Many MUC schemes operate behind legitimate-looking 'promoter' companies. Diligens looks through the promoter to verify the actual paying entities.

Question 9

What is the Diligens Beta Programme?

Accepted Answer

Our Beta programme is an exclusive partnership for forward-thinking recruitment agencies preparing for April 2026. Instead of just buying software, Beta partners get direct access to Diligens' founder, help shape product features, and receive forensic services at significantly reduced early adopter rates. It's designed for agencies who want to be ahead of the curve, not scrambling when the deadline hits.

Question 10

Do I need to enter all my supplier data myself?

Accepted Answer

No. With our Concierge Onboarding, we do it for you. Simply provide your supplier list, and we perform the initial forensic audit manually. We then populate your Guardian dashboard with this data. When you first log in, you're looking at a fully populated risk map of your supply chain — not an empty dashboard waiting for data entry.

Question 11

Does Diligens use AI?

Accepted Answer

Not for our risk detection. We use heuristics — logic-based rules refined from real fraud investigations. This is transparent and deterministic: the same input always gives the same output. AI can hallucinate or give inconsistent results. Our heuristics don't. If we flag a company, we tell you exactly why with specific evidence you can verify yourself.

Don't inherit the debt

HMRC Says You Must Audit Your Supply Chain.

But how do you audit potentially thousands of hidden entities?

Your Potential Annual Liability Exposure

Single Large Employer

Thousands of Micro-Entities

Compliance Certificates Are No Longer Enough

Organisation Verification

Tax Verification & Certification

Complete Protection

The Red Flags That Certificates Can't See

Director Velocity

Clone Clusters

Phoenix Companies

Offshore Control

Name Patterns

Address Anomalies

Shelf Companies

Zombie Status

SIC Code Mismatch

From Forensic Deep-Dive to 24/7 Guardian.

Identify Your Blind Spots

Does your screening detect 'Nominee Velocity', where officers hold high volumes of appointments across unrelated sectors?

Frequently Asked Questions