Deloitte stays mum on future contractor hiring strategy as umbrella company sector shake-up looms
With major legislative changes set to rock the umbrella company sector in 2026, why are some advisories and other hiring companies keeping to an umbrella-only contractor policy?
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New law, new risks
The new law shifts responsibility for Pay As You Earn (PAYE) from umbrella companies to recruitment agencies or end clients, raising serious questions about the future of these intermediary firms and how they will be used to engage contractors.
Deloitte, known for its strict policy of requiring associates to contract through approved umbrella companies, declined to comment on how the upcoming changes will affect its contractor engagement strategy. This silence has left contractors and industry watchers guessing about potential shifts in Deloitte’s approach at a time when the firm is “especially keen to hear from software developers and engineers” for its current openings.
Deloitte states on its website that it has “created a preferred list of Umbrella Companies” contractors can select from. “While we cannot accept outside suppliers, we are confident that our in-house list will provide you with the high-quality service you are looking for,” says Deloitte.
Other advisory firms such as PwC still offer several ways of working with contractors including Personal Service Companies/ solo self-employed workers, temp workers and fixed-term contractors.
The Freelance Informer put several questions to Deloitte, seeking clarity on the firm’s position. These included enquiries about the possibility of Deloitte bringing contractor recruitment in-house, a potential move towards hiring contractors as limited companies, and the anticipated impact on umbrella company consolidation. Despite a request for comment, Deloitte said it was not possible to comment at this time.
Umbrella industry consolidation: what could it mean?
Industry experts suggest that the new legislation could lead to increased scrutiny of umbrella companies and a greater focus on compliance. This may prompt companies that engage contractors to rethink their reliance on these intermediaries and explore alternative models for engaging contractors.
However, there is another possibility, as expressed and reported by recruitment and umbrella industry sources. We could expect more consolidation in the umbrella sector with a small less competitive pool of Managed Service Companies to handle contractor payments. These companies would likely be owned by financial investors and expect strict due diligence to avoid tax avoidance and unscrupulous worker treatment.
The looming changes also coincide with reports of a hiring freeze across various UK companies due to rising employer National Insurance contributions. This adds another layer of complexity to the situation, potentially influencing Deloitte’s decisions regarding contractor engagement.
As the April 2026 deadline approaches, contractors and the wider industry eagerly await hiring companies’ responses. Their decision could significantly impact the landscape of contractor engagement in the UK and set a precedent for other large organisations.
Are you a contractor working in the advisory sector? What’s your opinion on the subject?