Umbrella Reform Is Coming; Make Sure Your Staffing Partners Are Proactive and Compliance First

Jonothan Blaber • June 25, 2025

With draft legislation on umbrella company reform expected July 2025, much of the conversation has focused on the umbrella providers themselves. But if you are an end client engaging contractors through recruitment agencies, you may be closer to the risk than you realise.


The government’s consultation made one thing clear, where non-compliant or financially unstable umbrella providers are used, liability could be shared across the supply chain, including you as the client.


Working only with compliant, financially stable umbrella companies has never been more important with the full force of legislation expected to be implemented in April 2026. The risk is no longer limited to the umbrella provider. Clients must take a more active role in ensuring their supply chains are secure, transparent, and compliant.


Now is the time to ensure that your staffing partners are taking a proactive, compliance first approach to protect your business.


Eden Smith & Future-Proofing Clients Against Compliance Risk


At Eden Smith, we understand that in a fast-evolving regulatory environment, peace of mind comes from knowing your staffing partner is compliance-first. We’ve been working ahead of the curve, embedding enhanced governance processes and early onboarding with trusted partners – including Giant, a long-standing industry leader in IR35 compliance and umbrella management.


But we don’t just talk about compliance – we deliver it through action. From stringent supplier due diligence  to routine auditing  and contractor education, our processes are built to shield clients from risk and give them full visibility and assurance across the hiring lifecycle.


Flexible Hiring, Without the Compliance Guesswork


We also know that compliance doesn’t have to come at the cost of flexibility. Eden Smith works with clients to design talent solutions that meet business needs without exposing them to legislative risk. Whether you need:


  • Contractors via compliant umbrellas
  • Fixed-term consultants
  • Permanent hires –  on either a retained  or contingency  basis


…we help structure your workforce for agility and growth – without tripping over red tape!


In many cases, we also help clients unlock hiring budgets  by advising on the most cost-effective and compliant route to talent. With deep understanding of headcount constraints, IR35 complexities, and project urgency, we position ourselves not just as a recruiter, but as a strategic workforce partner.


What will Change?


The proposed reforms are expected to introduce:


  • A statutory definition  of an umbrella company, which will end any ambiguity about who qualifies
  • New responsibilities  for recruitment agencies to verify the compliance and financial stability of umbrella providers
  • Joint & several liability, meaning that if an umbrella company fails to meet its tax or worker obligations, your recruitment partner, or even your own business, could be held responsible for unpaid tax


This is not just a change in definitions, it is a shift in accountability. Clients will need to be confident that every link in the supply chain can stand up to scrutiny.


The Risk to You as a Client


Even if you don't choose the umbrella company directly, your agency might. And if that umbrella operates non-compliantly, the financial penalties, reputational damage, and lengthy HMRC investigations could land on your doorstep.


That’s why it’s critical to ensure your staffing suppliers are acting proactively, not reactively, to protect your business.


What You Should Be Asking Your Staffing Partners


To stay protected and ahead of the changes, now is the time to challenge your staffing partners. Here is how to get started:


1. Ask for a review of their umbrella PSL

Find out who they are working with. Are those umbrellas established, financially sound, and subject to regular audits?


2. Request documented due diligence

Your agency should be able to show exactly how they have assessed and approved their umbrella providers. Relying on verbal assurances is not enough.


3. Insist on proof of compliance, insurance, and financial stability

 This should include:

  • PAYE compliance
  • Appropriate insurance cover
  • Financial health checks or audits
  • Confirmation of good standing with HMRC


4. Expect consistent, auditable record keeping

Any umbrella-based engagement should be traceable, auditable, and clearly documented to protect your business if HMRC or legal teams ever need to investigate.


5. Check internal training levels

Consultants and compliance staff should be fully briefed on the reforms and be ready to answer your questions about how risk is being managed.


A Strategic Opportunity


Working with staffing partners who prioritise compliance over convenience is more than a regulatory necessity – it’s a strategic advantage.

At Eden Smith, we see these reforms not just as a burden, but a chance to future-proof your workforce, reduce hidden costs, and streamline your hiring decisions with full confidence in compliance.


The Bottom Line

Shared liability means shared responsibility, and it starts with your staffing partner.


Thanks to our proactive processes, our trusted partnership with Giant, and our flexible approach to hiring models, Eden Smith is helping clients stay protected, agile, and ready for the legislative shift ahead.


Now is the time to ask the right questions, and partner with the right people. How can we help?


By Christa Swain December 3, 2025
Executive Summary: AI, Ethics, and Human-Centred Design Our recent Leaders Advisory Board event - designed in partnership with Corndel - featured three engaging sessions that explored how AI impacts human cognition, customer experience, and fairness. Here's what we learnt: 1. Think or Sink – Are We Using AI to Enhance or Reduce Cognitive Ability? Speaker: Rosanne Werner , CEO at XcelerateIQ & ex Transformation Lead at Coca-Cola Roseanne opened the day with an interactive and thought-provoking session, firmly positioning AI: “AI should be your sparring partner, not your substitute for thinking.” Her research revealed a striking insight: 83% of people using LLMs couldn’t recall what they wrote, compared to just 11% using traditional search . The message? It’s not about avoiding AI, but using it in ways that strengthen thinking , not outsource it. Roseanne explained how our brains form engrams - memory footprints that enable creativity and critical thinking. Over-reliance on AI risks weakening these pathways, reducing retention and problem-solving ability. She introduced the Mind Over Machine Toolkit , six strategies to use AI as a thinking partner: Provide Context First – Frame the problem before asking AI. Use AI as a Challenger – Stress-test ideas and uncover blind spots. Iterative Co-Creation – Collaborate, refine, and evaluate. Document Your Thinking – Keep reasoning visible. Reflective Prompts – Support reflection, not replace judgment. Sparring Partner – Test assumptions and explore risks. Roseanne summed it up with a simple rule: use Sink for low-value, repetitive tasks, and Think for strategic, creative decisions. 2. Designing Chatbots with Human-Centred AI Speaker: Sarah Schlobohm , Fractional Chief AI Officer Sarah brought a practical perspective, drawing on experience implementing AI across sectors - from banking and cybersecurity to rail innovation. She began with a relatable question: “Who’s been frustrated by a chatbot recently?” Almost every hand went up. Through a real-world example (redacted out of politeness), Sarah illustrated how chatbots can fail when designed with the wrong priorities. The chatbot optimised for deflection and containment , but lacked escape routes , sentiment detection, and escalation paths - turning a simple purchase into a multi-day ordeal. “Don’t measure success by how well the chatbot performs for the bot—measure it by how well it performs for the human.” Sarah introduced principles for better chatbot design: Human-Centred Design – Focus on user needs and emotional impact. Systems Thinking – Consider the entire process, not just chatbot metrics. Escalation Triggers – Negative sentiment, repeated failures, high-value intents. Context Awareness – Detect when a task moves from routine to complex and route accordingly. The takeaway? Automation should remove friction from the whole system - not push it onto the customer. 3. Responsible AI and Bias in Large Language Models Speaker: Sarah Wyer , Professional Development Expert in AI Ethics at Corndel “When we create AI, we embed our values within it.” She shared her journey tackling gender bias in large language models , from GPT-2 through to GPT-5, and highlighted why responsible AI matters. AI systems reflect human choices - what data we use, how we define success, and who decides what is fair. Real-world examples brought this to life: facial recognition systems failing to recognise darker skin tones, credit decisions disadvantaging women, and risk assessment tools perpetuating racial bias. Even today, LinkedIn engagement patterns show gender bias! Sarah made the point that simple actions - like testing prompts such as “Women can…” or “Men can…” - can reveal hidden disparities and spark vital conversations. To address these issues, Sarah introduced the D.R.I.F.T framework , a practical guide for organisations: D – Diversity : Build diverse teams to challenge bias. R – Representative Data : Ensure datasets reflect all user groups. I – Independent/Internal Audit : Test outputs regularly. F – Freedom : Create a culture where employees can challenge AI decisions. T – Transparency : Share processes without exposing proprietary code. Wrapping up the final session - before we opened the floor to panel questions and debate - Sarah created the opportunity to discuss how we address AI bias within our organisations by stepping through the DRIFT framework. Shared Themes Across All Sessions AI is powerful, but context matters . Human oversight and ethical design are critical . Use AI to augment thinking , not replace it. Measure success by human outcomes , not just automation metrics. We've had such great feedback from this event series - especially around the quality of speakers and the opportunity to have meaningful conversation and debate outside of functions. Definitely more in the events plan for 2026! If you'd like to be part of the conversation please navigate to our LAB events page to register your interest .
Woman and man touching hands, digital data flowing between them, with digital head projections.
By Eden Smith December 3, 2025
Discover why teams resist AI and how leaders can drive real buy-in using behavioural science, transparency, and human-centred adoption strategies.
People in office meeting with person on screen via video call.
By Eden Smith December 2, 2025
Discover why Data Translators, hybrid talent blending business, data, and communication, are becoming essential as organisations move beyond pure tech roles.
Show More