Payroll Data Gaps Exposed Ahead of JSL, With 60% of Professionals Demanding Greater HMRC Data Visibility

WHY THIS MATTERS:
HMRC’s Joint and Several Liability (JSL) reforms, taking effect in April 2026, significantly raise the stakes for payroll compliance by extending liability for unpaid tax and National Insurance across labour supply chains. While Finity’s research shows universal confidence among payroll professionals, the underlying data reveals operational gaps — from limited HMRC data visibility to outdated, disconnected payroll systems.

Nearly half of respondents cite legacy technology as the biggest barrier to readiness, while many still lack clarity on the requirements themselves. This disconnect suggests that perceived preparedness may not match practical capability. As JSL shifts compliance from periodic checks to continuous oversight, organisations will need real-time data access, stronger audit trails and more integrated payroll systems to manage risk effectively.

New research from Finity reveals a growing gap between perceived confidence and operational capability among payroll professionals ahead of HMRC’s introduction of Joint and Several Liability (JSL) in April 2026.

A survey of 342 finance professionals involved in payroll found that 100% say they feel confident their organisation is ready for the upcoming JSL reforms.

However, when asked about the biggest barriers preventing full readiness, the data tells a slightly different story. Three in five organisations (60%) say they need greater visibility of payroll data at source from HMRC while more than a quarter (28%) admit they still lack clarity around the JSL requirements. 

For larger organisations with 250–1,000 employees, limited data visibility is the single biggest barrier to readiness, cited by 72% of respondents. Among the largest employers (1,000+ employees), concern shifts to whether existing technology can support heightened compliance and audit demands, alongside ongoing uncertainty about the reforms themselves.

The findings suggest that while confidence levels are high, underlying data visibility, technology capability and regulatory clarity gaps remain, raising questions about how prepared organisations truly are for the practical realities of JSL. 

Under the JSL reforms, HMRC will have greater powers to hold agencies and end clients jointly liable for unpaid tax and National Insurance contributions in labour supply chains, significantly increasing the importance of accurate, timely and transparent payroll data.

Despite strong intent and awareness across the profession, the findings suggest that technological challenges risk undermining readiness for one of the most significant upheavals to payroll compliance in decades.

Nearly half (47%) of respondents cited outdated or disconnected payroll systems as the single biggest barrier preventing their business’s full preparedness for JSL, while almost a third (32%) said a lack of automation or reliance on manual processes posed the biggest obstacle.

The data reflects a broader challenge facing payroll teams while navigating an increasingly complex and fast-evolving compliance landscape – using legacy technology that struggles to keep pace. 

Varun Monteiro, CEO of Finity, said: “What our research really highlights is that JSL is exposing weaknesses in payroll operations, rather than a lack of intent or awareness. Payroll teams are being asked to do more, manage greater risk and provide watertight assurance across supply chains, and while they are taking JSL seriously, many feel held back by fragmented data, limited visibility and technology that was never designed for this level of accountability

“Crucially, there is a real appetite for more transparent visibility of payroll data at source from HMRC supported by modern, connected payroll systems that can ensure real-time compliance.” 

He continued: “JSL turns compliance into a continuous process and to do that successfully, the profession must feel confident, not just in the people and processes delivering it, but in the underlying systems and data flows that support them. Without that foundation, organisations risk reaching the April roll-out exposed, even if they feel ready for it.

“With under two months until the reforms take effect, we are urging organisations to review their payroll infrastructure, data access and supply chain processes to ensure they are genuinely JSL-ready. Only those that invest now in connected payroll systems and clearer data visibility will be well-placed to manage risk across their supply chains as enforcement tightens.”

These JSL-focused findings form part of Finity’s wider research programme, with further data on payroll efficiency, technology capability and day-to-day operational performance due to be released in the coming weeks.

Having championed greater transparency at source in its 2025 whitepaper, Finity has helped catalyse positive action from HMRC, which is now actively engaging with the industry to progress much-needed API solutions. 

FF NEWS TAKE:
JSL is acting as a stress test for payroll infrastructure. Confidence may be high, but fragmented systems and manual processes could quickly expose weaknesses once enforcement begins.

The real issue isn’t awareness — it’s operational resilience. As liability extends across supply chains, payroll becomes a strategic risk function rather than an administrative one. Organisations that invest now in automation, connected systems and clearer HMRC data integration will be better positioned when scrutiny intensifies. Those relying on legacy workflows may find April 2026 arrives faster than their infrastructure can adapt.