Don’t be a fool this April: 4 major changes will impact sole traders, contractors & agency workers this month

By The Freelance Informer Last updated Apr 1, 2026

April 2026 is a month filled with major changes for workers

While April Fool’s Day is usually for pranks, the four changes hitting the UK freelance, contracting and temp worker market this month are very real.

The most critical story for most freelancers is the massive shift in the IR35 Small Company exemption and the rollout of Joint and Several Liability rules. This will affect 17,000 companies. Are your clients among them?

Read this report for the breakdown of what else is changing right now and how it impacts freelancers, contractors and agency workers.

Checklist for today:

Limited Co’s: Check if your client is now “small” (turnover less than £15m)
Umbrella workers: Ensure your provider isn’t a “disguised remuneration” scheme and prep to change umbrellas should your agency request it
Temps & Agency workers: Verify your agency has updated your contract to include Day-One SSP
Sole traders: Confirm your software is ready for the first MTD quarterly filing

#1 “small” company IR35 Reset

From 6 April, 2026, the financial thresholds defining a small business have officially increased, exempting thousands of additional firms from the off-payroll working (IR35) rules.

What’s changed?

The turnover threshold for a small company has risen from £10.2m to £15m, and the balance sheet total from £5.1m to £7.5m.

How many companies will this impact?

Approximately 14,000 companies that were previously “medium-sized” are now “small.” These firms no longer have to issue a Status Determination Statement (SDS).

What action should freelancers take today?

If your client now falls under these new thresholds, the legal responsibility to determine IR35 status shifts from the client back to you. You must resume self-assessing your status to avoid HMRC penalties.

#2 Joint and Several Liability (JSL) for umbrella workers

For those in banking and IT who work through umbrella companies, a major compliance crackdown begins today to eliminate “disguised remuneration” schemes.

What’s changing?

HMRC now has the power to recover unpaid PAYE and National Insurance (NICs) from the “relevant party” in the chain—usually the recruitment agency or, if no UK agency exists, the end-client.

Where’s the risk?

There is no “reasonable care” defence; agencies can be held liable for an umbrella company’s tax avoidance even if they weren’t aware of it

What can agency workers expect?

The Impact: Expect your agency to become much stricter, likely forcing you onto a small, “vetted” list of accredited umbrella companies to protect themselves from this new financial liability, according to Simply Business.

#3 Employment rights: The day-one changes

For temp/agency workers and fixed-term contractors, the Employment Rights Act 2025 measures will officially go live on 6 April.

Statutory Sick Pay (SSP): The three-day waiting period is gone. SSP is now a day-one right for all workers, and the Lower Earnings Limit has been removed, meaning even the lowest-paid temp workers are now eligible

New Calculations: SSP is now calculated as the lower of 80% of average weekly earnings or the standard flat rate

Paternity leave: This has also become a day-one right, allowing contractors on fixed-term assignments in sectors like banking to claim leave immediately upon starting a role

#4 Making Tax Digital (MTD)

If you are a sole trader or IT consultant earning over £50,000 not solely from your limited company, this month marks the start of the mandatory digital record-keeping era.

You must now use HMRC-compatible software to keep digital records and submit quarterly updates instead of a single annual return.

Be aware of penalties. A new points-based system starts in April; each late quarterly submission earns a point, with four points resulting in an automatic £200 fine, according to Armstrong Watson.