RM6376, JSL and the Education Supply Chain

RM6376, JSL and the Education Supply Chain

What The Changes Mean for MSPs, Recruiters and Their Supply Chains

As pupils return this September, the education recruitment supply chain is under increasingly more scrutiny than in recent years.

The Government Commercial Agency's (GCA) RM6376 framework is now in effect, academy trusts face new procurement requirements, and new Joint and Several Liability (JSL) rules have changed how unpaid PAYE and National Insurance contributions (NICs) can be recovered when an umbrella company sits within a labour supply chain.

For Managed Service Providers (MSPs), recruitment agencies and others managing education staffing supply chains, these developments are important, but for different reasons.

RM6376 is primarily about procurement standards and how supply teachers and education recruitment services are sourced. JSL is about tax liability and where responsibility can sit when an umbrella company fails to meet its PAYE and NIC obligations.

Understanding the distinction between the two is important when assessing your wider supply-chain risk.

RM6376: A New Procurement Standard

RM6376, the GCA's Supply Teachers and Education Recruitment framework, went live on 30 April 2026 and runs until 29 April 2029.

From September 2026, academy trusts are required to procure supply staff through a compliant framework agreement, with local authority schools strongly encouraged to do the same.

For agencies and MSPs operating within the framework, RM6376 provides a clear set of procurement standards, including pre-approval, fee transparency and standardised safeguarding requirements aligned with Keeping Children Safe in Education (KCSiE).

Being an approved Lot 1 supplier is therefore a meaningful credential and can provide confidence around how an agency operates.

However, framework approval and tax compliance address different areas of risk.

RM6376 does not determine the tax compliance of every organisation further down the labour supply chain. For agencies and MSPs working with umbrella companies, that remains an important consideration, particularly now that JSL is in force.

JSL: Understanding the New Tax Exposure

From 6 April 2026, Chapter 11, Part 2 of the Income Tax (Earnings and Pensions) Act 2003 introduced Joint and Several Liability for unpaid PAYE and National Insurance within labour supply chains involving an umbrella company.

For agencies and MSPs, the practical implication is that a tax shortfall further down the supply chain can now create a financial exposure further upstream.

The key points are:

• If an umbrella company in the chain fails to correctly deduct and pay PAYE or NICs, HMRC can now issue a debt notice to the uppermost agency or MSP in the supply chain, rather than liability sitting solely with the umbrella company.
• Where there is no agency involved, liability can pass to the end client.
• There is no statutory defence under JSL. Whilst robust supplier due diligence remains important, it does not remove liability if a relevant tax shortfall arises.
• JSL is separate from the broader umbrella company regulation expected under the Fair Work Agency from 2027. JSL is a tax compliance measure that is already in force.

This makes supply-chain visibility an increasingly important consideration for agencies and MSPs.

For education recruitment businesses, where staffing volumes can increase significantly at the start of the academic year, this is a good opportunity to review not only who your direct umbrella partners are, but also how confident you are in the wider supply chain supporting your placements.

What Previous Cases Can Teach Us

Tax compliance issues within labour supply chains are not new.

Previous HMRC investigations have highlighted situations where umbrella companies failed to meet PAYE and National Insurance obligations, creating significant tax liabilities within the wider supply chain.

In one historical case, an offshore umbrella company was found to have been paying thousands of UK supply teachers while avoiding employer National Insurance contributions.

Under the rules that applied at the time, there were circumstances in which HMRC could potentially look further up the supply chain, although establishing that liability would have been more complex and costly.

JSL changes the position.

Where the relevant conditions are met, HMRC now has a statutory route to recover unpaid PAYE and NICs directly from the agency or MSP closest to end client.

Similar tax disputes have also arisen outside the education sector, including healthcare and construction, with tribunal cases involving significant unpaid PAYE and National Insurance liabilities.

The lesson for agencies and MSPs isn't that every supply chain presents a problem. It is that tax compliance further down the chain can have financial consequences further upstream. Therefore, taking all appropriate due diligence and risk management measures has become a critical component.

Managing JSL Exposure Alongside Compliance

RM6376 compliance, safeguarding and supplier due diligence remain essential. However, they address different aspects of supply-chain risk.

For MSPs and recruiters managing education staffing, some useful questions to consider this term include:

• Do we have appropriate visibility of the umbrella companies operating within our supply chain?
• How frequently do we review our umbrella partners and the information supporting our due diligence?
• Is our supplier due diligence process documented and up to date?
• Do we understand where JSL liability could sit if a tax shortfall arose?
• If a shortfall did arise, how would the resulting financial exposure affect our business?

These are not questions about replacing existing compliance processes. They are about building a more complete picture of supply-chain risk.

Compliance Is the First Layer. Protection Is Another.

Working with SafeRec Certified umbrella companies can form an important part of a robust supply-chain due diligence strategy. SafeRec provides businesses with greater visibility and assurance when assessing the compliance standards of the umbrella companies they work with. However, JSL introduces a separate consideration. Even where appropriate due diligence has been completed, the legislation can create financial exposure further up the supply chain if a relevant PAYE or NIC shortfall arises. This is where specialist Tax Liability Insurance can provide a dual layer of protection, complementing the compliance and due diligence measures already in place. Orbio offers Tax Liability Insurance for businesses working with SafeRec Certified umbrella companies, underwritten at Lloyd's. The cover is designed to help businesses manage the financial consequences of certain tax liabilities arising within their labour supply chain.

For agencies and MSPs, that distinction is important. The objective isn't simply to identify risk, but to understand how much of that risk the business is prepared to retain and where specialist protection could form another part of the overall strategy.

A Proactive Approach to JSL Protection

RM6376 and JSL address two different areas of the education recruitment landscape.

RM6376 establishes procurement expectations for the supply of education staff. JSL changes how unpaid PAYE and NICs can be recovered when an umbrella company is involved in the labour supply chain.

Neither replaces the other, and compliance with one does not remove the considerations created by the other.

For MSPs and recruitment agencies, the start of the new academic year provides a useful opportunity to review the wider picture: your framework obligations, your supplier due diligence, your supply-chain visibility and the financial exposure that could remain if a tax shortfall occurred.

Orbio helps businesses understand and manage the financial exposure created by JSL, complementing the due diligence and compliance processes they already have in place.

If you would like to understand how Tax Liability Insurance could fit within your existing supply-chain risk strategy, speak to the Orbio team on 020 3468 0009 or email hello@orbioinsurnace.com

Frequently asked questions

What is Joint and Several Liability (JSL)?

JSL is derived from new UK tax legislation, effective from 6 April 2026 under Chapter 11, Part 2 of the Income Tax (Earnings and Pensions) Act 2003, which allows HMRC to recover certain unpaid PAYE and NICs from the recruitment agency or MSP at the top of a labour supply chain where an umbrella company fails to meet its obligations.

Is RM6376 the same as JSL?

No. RM6376 is a GCA procurement framework governing how schools and trusts procure supply staff. JSL is a separate tax measure concerning liability for unpaid PAYE and NICs within labour supply chains involving umbrella companies. Being compliant with RM6376 does not remove JSL exposure.

Does due diligence protect an agency from JSL liability?

Whilst due diligence remains an important part of managing supplier and supply-chain risk, having such measures would not provide an agency or MSP with a statutory defence under JSL.

Who does JSL apply to?

Where the relevant conditions are met, JSL can allow HMRC to recover unpaid PAYE and NICs from the topmost recruitment agency or MSP in the labour supply chain. Where there is no agency, liability can pass to the end client.

The precise application of JSL depends on the structure and circumstances of the relevant supply chain.

What is Tax Liability Insurance?

Tax Liability Insurance helps to protect recruitment agencies from the financial risk of JSL. Orbio’s tax liability insurance works exclusively with SafeRec certified umbrella’s and will respond if HMRC launches an investigation. The policy covers legal costs, professional fees and any PAYE/NIC owed as well as fees and interest if HMRC transfer liability to the agency.

To find out more about Tax Liability Insurance get an instant quote now.