What is it?
From 6th April 2015, any Employment Intermediary who has a direct contractual relationship with an end user/hirer (with whom they place workers) must send a report to HMRC each quarter with details of each worker paid where PAYE was not operated (i.e. not reported on a PAYE RTI return – Full Payment Submission).
In other words, a Recruitment Agency who pays a worker through an Umbrella company or direct to their own Limited Company (PSC) rather than operating PAYE themselves (via their own PAYE payroll) MUST be reported to HMRC on an Employment Intermediary report every quarter.
Why the changes?
These changes have been brought in to help ‘police’ the Onshore/Offshore Intermediaries legislation which took effect in April 2014, to tackle the avoidance of employment taxes (false self-employment) by using intermediaries.
The first quarter (6th April – 5th July) has now elapsed, and Employment Intermediaries now have one month (until 6th August) to submit their first quarter’s report. This must be done by uploading a CSV/OSD file containing the information required (see the link below for what must be reported) to the HMRC website. You must specifically add this feature to your HMRC online services section by entering your company’s PAYE reference and Accounts Office reference numbers.
There are fines in place for intermediaries that do not comply, file on time or provide false information.
You may find the following link of some use in the lead up to the first deadline:
These changes place even more of an administrative burden on Recruitment Agencies. If you’re still unsure of your obligations as a result of these changes, Sapphire can provide you with further advice and assistance in order to comply with these new requirements.
Please feel free to contact us at any time if we can help in any way to meet your new obligations.