Record keeping & reporting requirements for intermediaries
Towards the end of last year HMRC published a consultation on the quarterly reporting obligations arising from the amendments to the agencies tax legislation introduced by the Finance Act 2014.
Consequently, where an intermediary has a contract with the hirer to provide an individual’s services, the intermediary must provide HMRC with specific details relating to the individual. This applies where the intermediary has not deducted employment taxes from their payment. The objective behind the provision is to help HMRC in enforcing the ‘false self-employment legislation’, technically known as the amended provisions of sections 44-47 Income Tax (Earnings and Pensions) Act 2003.
Following the consultation, HMRC has now released their response which contains a number of changes. For example, the requirement for an intermediary to provide a nil return after a worker has stopped work has been reduced from the initially proposed 3 years to 1 year.
You will also find that the type of information that must be reported by the intermediary to the following has been reduced to:
• Intermediary name and address
• PAYE number and PAYE reference
• Reporting period from and to
• Is this a NIL return? Y/N
• Have you ceased operating? Y/N
• Worker name
• Worker National Insurance Number
• Where no NINO is available: Date of Birth and Gender
• Worker UTR (where self-employed or in partnership)
• Worker address and postcode
• Worker engagement details
• Worker UTR (where self-employed or director)
• Start date and end date of engagement
• Amount paid for the workers services (currency and inclusive of VAT) (only for the self-employed and others they have engaged where PAYE has not been operated)
• Has income tax been deducted from these payments?
• Name and address of party paid by intermediary for workers services
• Companies House registration number of party paid by intermediary for the worker’s services (if applicable).
HMRC will be providing draft guidance for stakeholders to comment on, but takes the opportunity to clarify three areas of stakeholder concern which it states were raised.
We will let you know via our Agency Zone newsletter as and when HMRC release the draft guidance. However in the meantime, if you have any questions about the changes to reporting requirements, please call our office on 01273 236 236.
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.