HMRC new reporting requirements
Group Operations Manager Vicky Roythorne explains new HMRC legislation due to come into effect in spring 2015.
With effect from 6 April 2015 new legislation will require all employment agencies to report additional information to HMRC. In short, all agencies must now submit quarterly reports to HMRC containing information on all workers where PAYE tax and national insurance is not deducted when payments are made.
This will apply to all workers who are supplying their services via an umbrella or personal service (own limited) company.
Understandably, this new legislation is causing uproar within contracting groups, and with trade bodies representing the professional contracting sector. Many people feel that the requirement for contractors working through their own limited companies to provide this personal information is unnecessary, and goes against the nature of the business to business contracts through which they are operating. Indeed, groups representing the contracting industry are hoping to force changes to this legislation before it comes into effect in April.
I will be closely monitoring the situation over the next couple of months and will report on developments. At Outsource UK we are committed to providing a compliant service to both clients and candidates and we take our regulatory responsibilities seriously so we are preparing our processes now in order to be able to comply with these legislation changes should they go ahead as planned.
The information that agencies must submit to HMRC for each contractor includes:
- full name
- address & postcode
- a national insurance number (if you do not have a national insurance number, a passport number, or if neither of these is available an identity card number)
- date of birth
Obviously the purpose of HMRC asking agencies to provide this information is to track whether appropriate tax and national insurance are being paid by all workers, and it follows on from the changes made in April last year, which focused on offshore umbrella companies and false self employment. Agencies already report on the payments made to limited and umbrella companies. This legislation increases the regularity of these reports and makes them more comprehensive. Agencies that fail to report or submit inaccurate reports face financial penalties, so HMRC are continuing to put pressure on agencies to ensure that they are operating compliant supply chains.
The legislation change applies to all recruitment agencies, so you will be asked to provide the same type of personal information by every compliant recruitment partner.
I’m confident that Outsource’s compliance processes are effective. We will only engage with umbrella providers who are on our preferred supplier list, and with personal service (own Limited) companies where you are both the director and shareholder of the company.
If you would like more information or to discuss this please contact Vicky Roythorne on 01793 430021 or by emailing firstname.lastname@example.org