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Joint and Several Liability (JSL): How TRANSPARENCY Can Help You Audit, Analyse, and Stay One Step Ahead
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Ross Gylanders
June 18, 2026
Navigating the differences between Umbrella and PEO can be tricky. To help here are the answers to some of our most frequently received questions.
As your employer, we are required by law to ensure that you have the right to work in the UK, regardless of your nationality.
At set up, we will happily talk you through some examples of acceptable right to work documentation and the ways in which you can provide this to us.
We make payments throughout the week, Monday through to Friday, up until 5:30 pm. Your payment will be processed in accordance with your agreed payment cycle, which we will discuss with you at set up. When your payment is processed, your payslip will be sent to you via email from [email protected].
We will also send you a text message on the day that your payment is processed, confirming the amount that you can expect to clear in your bank account.
We usually advise you to allow 2 hours for cleared funds to reach your account, although in most cases, you will receive your money almost instantly.
When your payment is processed, we will send you an email with an attachment which contains your payslip and a reconciliation statement.
On the first page of this attachment, you will find your payslip, and on the second page, you will find the reconciliation statement.
The reconciliation statement sets out the company’s income that we have received from the agency, along with a breakdown of company costs.
If your tax code has changed, this will be because we have received tax code update for you from HMRC. If you have a query in relation to your tax code or if you believe your tax code may be incorrect, you should call HMRC directly on 0300 200 3300 to discuss this with an advisor who can help.
On the reconciliation statement, under company costs, we set out the amount of Employer’s National Insurance that has been contributed from the company income in the specified pay period.
Employer’s National Insurance is a type of Class 1 National Insurance that employers must pay to HMRC in respect of their employees’ earnings.
On your payslip, under your deductions, you will find the amount of Employee’s National Insurance that you have contributed in that pay period.
Looking for answers?
In this section, there is a collection of our most frequently asked questions from self-employed CIS Workers
As your employer, we are required by law to ensure that you have the right to work in the UK, regardless of your nationality.
At set up, we will happily talk you through some examples of acceptable right to work documentation and the ways in which you can provide this to us.
A document that is used to prove your identity can not necessarily be used to
prove your right to work in the UK.
For example, a UK driving licence can be used as a form of identification, but it can not be used as proof of your right to work in the UK.
For a full list of acceptable proofs of right to work, please visit Trust ID.
To get a Unique Taxpayer Reference (UTR) number, you need to register for tax with HM Revenue & Customs (HMRC). The registration depends on whether you work for yourself or operate a business. To start the process of acquiring a UTR number, follow these 4 steps. Step 4 is particularly important.
Yes, but only if you are trading and invoicing as a Limited Company. Outside of this specific set up it would not be possible.
Yes of course. To request a summary simply call 01244 564 564 and our team will be happy to help.
A 30% Construction Industry Scheme (CIS) deduction means HMRC are currently treating you as unregistered, or they were unable to verify your details.
As a result HMRC apply the higher rate (30%) instead of the standard 20% registered rate or 0% gross payment status. We have listed below the most common reasons why this might occur:
Not registered: You have not yet signed up for the CIS scheme with us.
Verification failure: Your contractor may have entered an incorrect Unique Taxpayer Reference (UTR), National Insurance number, or business name that does not match our records.
Delayed update: If you registered recently, your details may still be processing and have not updated in our system yet.
Once verification is complete, HMRC will instruct you to use one of three CIS tax deduction rates:
Gross Payment Status (0%): No tax is deducted from the labour element; the subcontractor handles their own tax later.
Standard Rate (20%): Applied to subcontractors who are fully registered with HMRC but do not qualify for gross payments.
Higher Rate (30%): Mandatory for subcontractors who are completely unregistered or cannot be successfully verified by HMRC.
To receive your construction earnings in full with a 0% deduction, you must apply to HMRC for CIS Gross Payment Status. HMRC will grant this if your business passes three strict statutory tests:
The Turnover Test: Your net turnover (total turnover minus materials and VAT) over the last 12 months must be at least £30,000 for a sole trader. For limited companies, it must be at least £30,000 per director/shareholder, or a flat minimum of £100,000 for the corporate entity.
The Compliance Test: You must have filed all tax returns and paid all Income Tax, Corporation Tax, VAT, and National Insurance on time over the past year.
The Business Test: Your business must be carrying out construction work in the UK and operate through a dedicated business bank account.
Determining true employment status for CIS workers is a primary focus for HMRC compliance teams. A genuine CIS subcontractor is a self-employed business owner who provides their own specialist tools, manages their own working hours, can negotiate prices, and possesses a contractual right of substitution (the ability to pay someone else to do the work in their place).
If a worker is tightly managed, has no financial risk, and must perform the work personally using your equipment, HMRC may deem them an employee, meaning they must be paid via standard PAYE payroll rather than the CIS framework.
Understanding tax can be a bit of whirlwind experience. Here are some of our most frequently asked questions by self-employed people.
Most self-employed subcontractors operate under the standard 20% CIS tax deduction rate. This 20% is deducted by the contractor from your direct labour earnings and paid straight to HMRC as an advance payment toward your tax bill.
However, because the 20% deduction does not factor in your tax-free Personal Allowance (currently £12,570) or any of your legitimate, tax-deductible business expenses, you have usually overpaid tax by the end of the financial year. Filing a Self-Assessment tax return allows you to calculate your true tax liability and claim back this overpayment as a CIS tax rebate.
To maximise your HMRC tax refund, you must accurately claim all allowable, work-related business expenses. For construction workers, this includes:
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is a HMRC initiative that changes how sole traders and partnerships manage and report their earnings. Instead of filing one traditional, annual tax return, self-employed workers must keep digital records of their income and expenses and submit quarterly digital updates to HMRC.
Yes. Your eligibility for a CIS tax rebate remains completely unaffected by MTD. The primary difference is how your financial data is captured. Your MTD-compliant software can log your ongoing CIS deductions alongside your quarterly expenses.
When you submit your Final Declaration at the end of the tax year, HMRC reconciles your total digital records against the CIS deductions reported by your contractors, calculating and processing your tax refund as usual.
To successfully secure a rebate and protect your business during an HMRC audit, you must maintain clear evidence of your earnings and outgoings. Always keep:
Failing to file your annual tax information on time triggers immediate automated penalties. For traditional Self-Assessment, missing the 31 January deadline brings an instant £100 late-filing penalty, which escalates sharply after three months.
For those operating under Making Tax Digital, HMRC uses a points-based penalty system. Every time you miss a quarterly digital update deadline, you receive a penalty point. Once you hit a designated points threshold, an automatic financial penalty is issued, making it vital to keep your software sync routines regular.
From setting up a limited company to understanding the benefits is a lot to take in. Fortunately, we are here to help, and here are just a few of our most frequently asked questions.
Get in touch with our onboarding team and they’ll talk you through everything you need in order to get set up as quickly as possible. We’ll help you incorporate your company and get a business bank account as quickly as possible.
A name for your company. You need to choose one that isn’t currently in use – feel free to check here if you have one in mind.
A UK registered office address – one of which we can provide as part of our Platinum Plan.
A UK business bank account – we can assist with getting you set up with various banks, both challenger and established and one that will be most suitable to your needs.
We offer our service at zero upfront cost, ensuring that you don’t have to start with a deficit, keeping your cash flow healthy.
This will be the agency that you work with or the end client, depending on who takes that responsibility and they’ll let you know if they require invoices to be sent to them or not. In most cases, it will be self-billing and they will just require something as simple as a timesheet. If they do require an invoice, then our accounting software has great options allowing you to produce professional invoices and can include your company’s logo if you plan to have one.
Yes, you can! Claiming business expenses is a simple way to keep your business tax-efficient – it reduces your company’s profit, which in turn reduces your company’s Corporation Tax liability and payments. By claiming allowable expenses, you’re making sure you don’t pay a penny more in tax than you have to.
No. The Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) rules apply exclusively to sole traders and unincorporated landlords. Because your limited company is a separate legal entity subject to Corporation Tax rather than Income Tax, it is exempt from these rules.
Furthermore, HMRC formally cancelled plans to extend MTD to Corporation Tax. This means your limited company is not required to submit quarterly digital tax updates for its corporate profits; your accountant will continue to file your Company Tax Return (CT600) annually.
Your IR35 status dictates how your limited company’s income is taxed based on your working relationship with the client:
For assignments safely outside IR35, the standard is to utilise a salary and dividend split.
Contractor directors typically pay themselves a small salary up to the relevant National Insurance threshold. This salary is a tax-deductible expense for the company, reducing your Corporation Tax liability, while maintaining your state pension contribution record. The remaining company profits can then be distributed to you as dividends, which carry lower tax rates than salary and are entirely exempt from National Insurance.
Yes. Operating a limited company changes how your business reports tax, but as a company director, you must still file an annual personal Self-Assessment tax return by 31 January.
Your personal tax return is where you declare the salary you drew from the company payroll, any dividend distributions you received, and any external income (such as investment or rental yields). This allows HMRC to calculate your personal income tax liability after factoring in your tax-free Personal Allowance.
Compliance is at the heart of everything we do at ADVANCE. We are regularly asked questions about our procedures and processes to ensure our gold-standard compliance practices. Here are a few of our most commonly asked queries.
As the legal Employer of Record (EoR) under our FCSA-accredited Umbrella and PEO payroll models, we take full statutory responsibility for verifying every worker. We have partnered with TrustID, a leading certified Identity Service Provider (IDSP). Through TrustID’s secure online platform, we perform rigorous digital identity verification, biometric liveness checks, and facial recognition scans for all applicants—regardless of whether they are an employee or a self-employed Construction Industry Scheme (CIS) subcontractor.
We provide absolute, undeniable proof of compliance via our market-first Transparency portal. This portal grants your agency real-time visibility over worker payments and matching HMRC Real-Time Information (RTI) submissions. You can log in at any time to audit worker tax data by week, month, or year, and export it for offline record-keeping. Backed by our Chairman – a qualified solicitor and recruitment law expert – our infrastructure guarantees total peace of mind.
ADVANCE strictly adheres to HMRC’s legislation regarding Supervision, Direction, or Control (SDC). As market leaders in SDC assessment, we evaluate every contractor’s working conditions upon onboarding. If a worker operates under the SDC of any party in the supply chain, they are processed under standard PAYE with zero tax-free travel or subsistence deductions, in line with FCSA codes of conduct.
If you know a contractor or worker who would benefit from our services, simply refer them to the ADVANCE team today. As a thank you for your successful recommendation, we will treat you to a £50 voucher once they are up and running.
