UK recruitment landscape facing a ‘seismic shift’

The UK recruitment landscape is set for a ‘seismic shift’ when the new umbrella legislation, stricter HMRC audits, and joint and several liability are introduced in April next year, a specialist employment lawyer has warned.

Kareena Prescott, founder of C2E Law, and a specialist in guiding recruitment companies through complex legal landscapes, says that in order to be fully prepared for when the new legislation takes effect in just eight months’ time, compliance must be made a strategic priority.

“April 2026 will mark a stark turning point and seismic shift for the UK recruitment landscape,” Kareena says, “with the new legislation set to totally reshape payroll, compliance, and supply chain accountability for recruitment agencies and end hirers, who will face unprecedented levels of scrutiny and risk.

“HMRC has made clear its intent to clamp down on PAYE irregularities, VAT fraud, tax avoidance schemes, and mini-umbrella company abuse, making compliance no longer a back-office process, but a strategic priority at the heart of agency operations.

“At the same time, the Employment Rights Bill promises to redefine worker protections,” she says. “Key measures include the introduction of ‘day one’ unfair dismissal rights, a ban on zero-hours contracts,  guaranteed hours contracts, and new rules requiring end hirers to pay shift cancellation fees. Alongside the creation of the Fair Work Agency, these reforms signal a future where transparency, accountability, and ethical employment practices are non-negotiable, and recruitment businesses must be ready.

“It is critical that anyone involved in hiring full or part time workers, whether recruitment business owners, HR leaders and professionals, or compliance professionals, realise just how important it is to prepare for the changes ahead of next April, and proactively set out to understand the workings and impacts of the new legislation in order to build business resilience in the face of this regulatory transformation.”

Free event to dive deep into the changes

Kareena is headline speaker at a recruitment industry must-attend event, that will bring together leaders, experts, and innovators from across the recruitment sector to help recruitment business owners and professionals, HR and compliance specialists to tackle what represents one of the most urgent challenges facing agencies today. Kareena will be joined by Claire Johnson, IRCA Ethical Lead Auditor and ex GLAA inspector, who will explore the key focus of the GLAA currently, the changes that are on the horizon, and how to tackle the current compliance challenges including fake right to work documentation.

The ‘Navigating the New Era of Recruitment Compliance’ takes place on Thursday 25 September 2025 in Birmingham. Sponsored by workforce reward, pay and engagement solution experts  Magic Connect, it is a rare and timely opportunity to gain clarity, share insights, build resilience in the face of regulatory transformation, and play a part in shaping the future of compliant, ethical recruitment.

The event will cover:

• What the legislative changes mean for agencies, end hirers, and their payroll operations.

• How to audit and future-proof compliance processes.

• How evolving end hirers, and contractor expectations will shape the sector.

• Practical steps to stay ahead of enforcement, avoid costly penalties, and explore the specific implications for the GLAA-regulated sector.

Magic Connect primarily supports recruitment agencies and contracting intermediary companies in temporary labour supply chains to deliver efficient and compliant workforce remuneration solutions with a focus on enhancing the worker experience. Magic Connect also supports traditional employment structures with payroll, wellbeing and engagement products.

Reserve your spot and find out more

The Navigating the New Era of Recruitment Compliance event is ideal for recruitment business owners, HR leaders, and compliance professionals. To find out more and book your seat, visit the event information page here: https://www.magic-connect.co.uk/recruitment-compliance-event

All delegates will receive a complimentary due diligence checklist produced by C2E Law for use with Umbrella / Intermediary suppliers.