In 2026, UK payroll is shifting from a back-office task to a strategic business function. Key changes include the 2026 Umbrella Reforms, stricter Joint & Several Liability (JSL) rules, and enhanced Employment Rights Act compliance. To remain compliant, businesses are moving toward automated HMRC reporting and expert outsourced solutions like Riddingtons Payroll to manage complex CIS, PAYE, and pension obligations.
For years, payroll was seen as a "check-the-box" administrative task. However, as we move through 2026, the landscape has fundamentally changed. With the rise of AI-driven auditing by HMRC and the increasing complexity of employment law, payroll is now a vital component of operational resilience.
At Riddingtons Payroll, we’ve seen a 40% increase in businesses seeking "strategic payroll" using real-time data to forecast workforce costs and manage risk before it hits the bottom line.
One of the most significant shifts this year is the implementation of the 2026 Umbrella Reforms. For recruitment agencies and contractors, the stakes have never been higher due to Joint & Several Liability (JSL).
JSL means that if an Umbrella company fails to pay the correct taxes, HMRC can look up the supply chain to recover those funds. This makes choosing an FCSA-accredited partner like Riddingtons essential. We provide a "guaranteed employment status decision," removing the financial risk from your business.
For our clients in the construction sector, managing the Construction Industry Scheme (CIS) remains a primary challenge. HMRC has tightened the "reasonableness" test for self-employment, making it easier for firms to accidentally fall into non-compliance.
How Riddingtons Simplifies CIS:
Many SMEs struggle with the "internal expertise gap." In 2026, the cost of a payroll error, both in fines and employee trust, far outweighs the cost of professional management.
To set up payroll, you must register as an employer with HMRC to get your PAYE reference number, choose a compliant payroll software (or provider), and collect employee National Insurance numbers and tax codes before their first payday.
While rates are adjusted annually, in 2026, eligibility begins on day one of employment for many workers under the new Employment Rights Bill. Always consult your payroll provider for the exact weekly rate as updated by the latest budget.
This depends on your "Inside IR35" status. Umbrella companies offer "hassle-free" compliance with all taxes paid at the source, while a Limited Company offers more control but requires significant administrative oversight. Riddingtons offers both solutions tailored to your specific contract.
With over 30 years of experience and 150,000+ payslips processed annually, Riddingtons is more than just a service provider, we are your partner in growth. Whether you are a local Kent firm or a national recruitment agency, we provide the "city firm" expertise with a personal, local touch.
Contact Riddingtons Payroll Today for a free consultation.
