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Contractors - new HMRC Reporting Requirements

Published over 2 years ago by Elkie Holland
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In April 2015 the Income Tax (Pay as you Earn) (Amendment No2) Regulations 2015 came into effect.  HMRC continues to strive to reduce the number of workers not subject to PAYE. It has added new reporting requirements for businesses that it considers to be ‘employment intermediaries’.  This definition now includes most recruitment agencies.  The new reporting requirement is one of a number of measures aimed at combatting the use of employment intermediaries to facilitate false self-employment and thereby avoid employment taxes.

From 6th April 2015 Prospectus IT Recruitment, (as well as other UK employment agencies) will have a statutory obligation to report to HM Revenue & Customs (HMRC) on all payments made to workers supplied to an end client for whom PAYE is not operated by Prospectus IT Recruitment.  This information is to be reported on a quarterly basis and will apply to all contractors that are using:

  • Personal Service Company, (Limited company owned and operated by a worker as the shareholder and director)
  • Umbrella Company, (Limited company employing the worker and operating PAYE)

Prospectus IT Recruitment will be required to report on our own details, plus the personal details of all affected workers and their assignment.  To ensure agencies / intermediaries supply the information timely and correctly there are financial penalties ranging from £250 to £1,000 per offence.

The first set of reports will be securely submitted to HMRC before 5th August 2015.  

What information goes in the Report ?

Reports must be filed using HMRC’s report template and must include the following information:

  • The intermediary’s full name, address and postcode.
  • Each worker’s personal details (including full name, address and postcode, National Insurance number or date of birth and gender if no NI number is known.
  • Engagement and payment details including:
    • currency and amounts pad
    • whether VAT was charged
    • reason why PAYE was not been operated
    • the worker’s unique taxpayer reference (if self-employed or a member of a partnership)
    • assignment start and end dates (if there is one) of the work with the client.

Prospectus IT Recruitment has no choice but to fully comply with this new legislation.

More information about the new legislative requirements can be found online at:

To ensure compliance with the ongoing quarterly reporting requirements, Prospectus IT Recruitment will streamline its new business process to capture the required worker data upfront at the start of an assignment.

Should you have any queries on the above please get in touch with Elkie Holland elkie@prospectus.co.uk or Gill Cotterell gill@prospectus.co.uk

PICTURE CREDIT:  Flickr

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