How to Spot Payslip Fraud After HMRC's Latest Warning

Tax Queen

Tax Expert @ Pie

3 min read

HMRC issued new guidance on 25 August 2026, warning around 700,000 agency and temporary workers in the UK to check their payslips carefully, after data showed at least 275,000 umbrella workers had at some point been engaged by companies that failed to meet their tax obligations.

Does This Affect You?

If you're paid through an umbrella company or a recruitment agency, this warning is worth five minutes of your time. HMRC says a payslip that looks completely normal, with tax and National Insurance neatly deducted, doesn't necessarily mean that money has actually reached HMRC. If you work in construction, healthcare, hospitality, or any sector that relies on flexible or temporary staffing, it's worth checking your own records today.

If you're a sole trader or freelancer who invoices clients directly and files your own self-assessment tax return, this particular fraud risk is less likely to touch you directly. Even so, it's a useful reminder of why keeping your own income and deductions properly tracked matters, whatever your working setup.

What Is Payslip Fraud?

Payslip fraud happens when the tax and National Insurance shown as "deducted" on your payslip isn't actually passed on to HMRC by the umbrella company or agency handling your pay. On paper, everything looks fine. In reality, the money may never leave the umbrella company's account, or it gets diverted elsewhere entirely.

HMRC previously estimated that at least 275,000 umbrella workers had, at some point, been engaged by companies that failed to meet their tax obligations in the 2022/23 tax year. That's a significant chunk of the roughly 700,000 people working through umbrella arrangements in the UK.

What Are the Warning Signs?

HMRC has set out several specific red flags it wants workers to check their own payslips against. None of these signs prove fraud on their own, but HMRC says any of them should prompt a closer look.

Has Your Take-Home Pay Changed Without Explanation?

A sudden dip or rise in what lands in your account, with no obvious explanation such as a change in hours or rate, is worth investigating straight away. Genuine payroll changes usually come with a clear reason attached; unexplained ones shouldn't be ignored.

Is a Different Employer Name Appearing on Your Payslip?

If the company named on your payslip changes without you being told why, that's a signal to ask questions. Workers are sometimes moved between linked companies without their knowledge, which can be a sign of the kind of structuring HMRC is warning about.

Are You Being Moved Between Payroll Companies Often?

Regularly shifting between different umbrella or payroll providers, particularly without clear communication from your agency or employer, is a known fraud pattern. It can also make it harder for you to keep track of exactly who is responsible for your pay.

Are There Unexplained "Admin Adjustments" on Your Payslip?

Vague deductions with no clear breakdown deserve a proper explanation from your employer or agency. Legitimate deductions, such as pension contributions or student loan repayments, should always be itemised and explainable.

Have You Lost Access to Your Payslip Portal?

If you're suddenly locked out of viewing your own payslip history, treat that as a serious warning sign. Losing visibility over your own pay records at the same time as other red flags appear is one of the clearer indicators something may be wrong.

Why Does This Matter Beyond Your Tax Bill?

This isn't just about an unexpected tax bill down the line, although that's reason enough to check. HMRC has been clear that problems with your payroll record can also affect tax refunds, Universal Credit, statutory sick pay, maternity and paternity pay, and even your State Pension entitlement in future.

Missing National Insurance contributions, in particular, can have knock-on effects that only surface years later, sometimes when you come to claim a benefit or check your state pension forecast and find gaps you weren't aware of. If underpaid tax does turn out to be an issue, it's worth knowing you may still be able to spread the cost of a tax bill through HMRC's payment plan options rather than paying it all at once.

Seb Maley, CEO of insurance provider Qdos, said the warning is an important reminder for anyone working through an umbrella company, noting that a payslip showing tax and National Insurance as deducted doesn't necessarily prove that money has actually reached HMRC. He added that while most umbrella companies operate compliantly, the scale of the sector means hundreds of thousands of workers need to know what to look for.

What Does This Mean for Recruiters and Businesses?

The warning isn't only directed at individual workers. Maley pointed out that, following recent reforms in the umbrella company sector, recruiters and businesses that engage umbrella companies should also take note.

That reflects a wider shift in how responsibility for payroll compliance is being viewed across the recruitment supply chain, not just by the workers being paid, but by the agencies and end clients who choose which umbrella companies to work with.

What Should You Do Now?

The simplest check is to compare your payslip against your HMRC Personal Tax Account or the HMRC app. If the income and deductions shown don't match what your payslip says, don't assume it's a system delay. Investigate it, and raise it with your umbrella company or agency directly if something doesn't add up. If you're not confident the issue is being resolved, HMRC's guidance points workers towards escalating unresolved concerns through official channels rather than letting them go unchecked.

Getting into the habit of checking your own records regularly pays off well beyond this warning, too. If you're self-employed or a landlord, the same discipline applies to staying ahead of your first Making Tax Digital deadline, where quarterly updates mean small, regular checks matter far more than they used to.

How Can Pie Tax Help?

Whether you're navigating umbrella pay or managing your own self-assessment, staying on top of your income and deductions is easier with the right support behind you. Pie Tax was built to take the stress out of self-assessment tax returns for sole traders, freelancers, landlords, and the self-employed, with clear tracking so nothing slips through unnoticed.

Find out how Pie Tax works, see why Pie is trusted by thousands of UK taxpayer. Ready to get started? Try Pie today to keep your own tax affairs firmly in your control.

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