Three of this week’s four stories already have deadlines that are running. The umbrella company liability changes took effect in April, and any agency or end-client that has not reviewed its supply chain arrangements is already exposed. The VAT reduction on children’s meals and family attractions opens on 25 June, leaving three weeks to get systems updated. The HMRC tax adviser registration manual is now published, and the August cut-off is the one most practices need to focus on.
The fourth story moves more slowly but matters just as much. The SRA is removing the exemptions that have kept lower-balance law firms outside the accountant’s report requirement. Early 2027 is closer than it looks.
Here is the detail.
Umbrella Company Liability Has Shifted to Agencies & End-Clients
From April 2026, agencies and end-clients that use umbrella companies in their labour supply chains carry direct exposure for unpaid PAYE and National Insurance if those umbrella companies fail to comply. HMRC can now pursue any party in the chain, regardless of which party was responsible for the non-compliance.
The practical consequence is significant. An agency that relied on contractual assurances from an umbrella provider, without independently verifying how payroll was actually operated, is no longer protected by that distance.
HMRC has estimated the compliance burden at £9.9 million in one-off implementation costs across the sector, with ongoing annual costs of £21.7 million.
Key facts:
- Joint and several liability for unpaid PAYE and NIC now applies across the supply chain
- Effective from April 2026
- One-off implementation costs estimated at £9.9 million sector-wide
- Ongoing annual compliance costs estimated at £21.7 million
- Due diligence must be evidence-based, not reliant on provider assurances
For any client running contractor or temporary workforce arrangements through umbrella companies, the question is no longer whether they have a contract in place. It is whether they can demonstrate, with documented evidence, how payroll is being operated.
HMRC Publishes Official Manual as Tax Adviser Registration Deadlines Close In
HMRC has published MTAR10000, the official manual for its mandatory tax adviser register. The phased rollout began on 18 May, and the manual answers a question that has been creating uncertainty across the profession: advisers who already hold an Agent Services Account do not need to register separately. They need to keep their account active and supply additional data if HMRC requests it.
For everyone else, the deadlines are now a matter of weeks rather than months for a significant portion of the profession.
Key deadlines:
- 18 May 2026: Initial rollout began
- 18 August 2026: Deadline for those holding only a Self Assessment or Corporation Tax online services account, with no Agent Services Account
- 18 November 2026: Deadline for third-party payroll providers who do not otherwise interact with HMRC
- 31 December 2026: Deadline for financial services organisations
During the three-month transition window following each group’s start date, HMRC will not apply sanctions where a registration application is already pending. That window does not extend indefinitely, and it does not apply to those who have not yet started the process.
VAT Drops to 5% on Children's Meals & Family Attractions from 25 June
The government is applying a temporary 5% VAT rate to a defined set of categories during the school holiday period. The relief runs from 25 June to 1 September 2026, a window of 69 days, and businesses need their point-of-sale systems and VAT coding updated before the opening date, then reverted from 2 September.
Qualifying categories:
- Children’s meals marketed, priced, and sold specifically for children, consumed on-premises at restaurants, cafes, or hotels
- Admission to cinema screenings, theatrical performances, shows, concerts, and exhibitions
- Admission tickets for zoos, theme parks, water parks, soft play centres, fairs, and museums
The exclusions are where errors are most likely. Sporting activities do not qualify. Adult meals sold in reduced portions or at discounted prices do not qualify. Only meals specifically positioned and priced as children’s offerings meet the threshold.
HMRC expects businesses to pass the savings to customers rather than retain them. Where customers have already prepaid for tickets that fall within the relief period, HMRC expects businesses to refund the excess VAT, though this is not a legal requirement.
SRA Ends Accountant's Report Exemptions for Low-Balance Law Firms
From early 2027, every law firm regulated by the SRA will be required to produce and file an accountant’s report, regardless of how much client money it holds. The current exemptions, which apply to firms holding an average of £10,000 or less in client funds or a maximum of £250,000, will be removed.
The change follows the collapse of firms including PM Law and Axiom Ince, where client money was lost and the problems were not identified until the damage was irreversible. The SRA’s position is that earlier, consistent reporting creates the conditions for identifying risk before it compounds.
Also In The News
Conclusion
The umbrella liability change is already in force. The MTAR10000 manual is published, and the 18 August deadline is the one to act on now. The VAT reduction opens in three weeks, with system changes needed at both ends of the window. The SRA accountant’s report change arrives in 2027, but the client conversations around it are worth starting today.
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