Government tightens oversight as new rules set to make agencies legally responsible for PAYE and NIC compliance by 2026
London, United Kingdom, 12 December 2025 – The UK government has expanded its public register of tax avoidance schemes and related entities, with a notable addition capturing the attention of the recruitment sector. Remedy Recruitment Group, a well-known agency supplying workers to the public sector, has been officially named by HMRC for failing to conduct adequate due diligence on umbrella companies later found to be operating tax avoidance schemes.
Remedy Recruitment Group positions itself as a trusted provider in the social care, education, and public sector markets, backed by a dedicated compliance team and accreditation through APSCo Compliance+ and REC Education Audited standards. However, HMRC’s findings highlight that umbrella companies linked to the agency were paying workers partly through untaxed additional payments, an arrangement the agency failed to identify or prevent.
HMRC emphasized that the workers, many of whom serve in healthcare roles or within the NHS, received a basic wage with proper tax deductions but were also given separate payments without Income Tax or National Insurance contributions. HMRC maintains that all income paid to workers must be treated as taxable salary.
Jonathan Smith, HMRC’s director of counter avoidance, said the development marks a significant enforcement milestone. “This is the first time we’ve named an employment agency as being involved in making avoidance arrangements available,” he stated. “Businesses must carry out proper due diligence on their supply chains and avoid any involvement in tax avoidance.”
APSCo responded by underscoring that its Compliance+ standard focuses on safeguarding and recruitment practices rather than tax or financial controls. The organization noted that it has issued extensive guidance to members on proper umbrella company due diligence and continues to reinforce best practices as regulatory expectations evolve.
The announcement comes ahead of a major regulatory shift. Starting April 2026, employment agencies will become legally responsible for ensuring accurate PAYE and National Insurance contributions when using umbrella companies. This change aims to prevent misclassification, hidden tax arrangements, and inaccurate reporting, placing clear responsibility on agencies to oversee tax compliance within their supply chains.
Alongside Remedy Recruitment Group, HMRC also updated its list of named tax avoidance schemes and associated companies, including newly added entities such as:
- Aura PAYE Limited
- Kingsborough Enterprises Limited
- Revolve Limited (Isle of Man)
- Engage Limited (Isle of Man)
- Acuity Professional Advisers Ltd
- Jadecourt Limited
- Magna Limited (Isle of Man)
- Simply PAYE Limited
- Eagle Pay Limited
As the crackdown intensifies, businesses across recruitment, payroll, and contracting sectors are being urged to proactively review their compliance processes. With tax enforcement becoming increasingly stringent, HMRC continues to encourage workers affected by flagged schemes to come forward and settle their tax affairs promptly.
