Intermediaries and quarterly compliance reporting

7 July 2015

‘Employment agencies’ that place more than one worker with a client that do not operate PAYE must make the first of their quarterly information returns to HMRC by 5 August 2015. This is a filing requirement that was introduced under the new rules in April. It is aimed at reducing disguised remuneration and false self-employment.

The term ’employment agencies’ is a misnomer, as the reporting rules can affect any intermediary (company, partnership or other structures) that;

  • has a contract with a client;
  • provides more than one worker’s services to a client because of a contract with the client;
  • provides the worker’s services in the UK – or if the services are provided overseas, and the worker is resident in the UK; and/or
  • makes one or more payments for the services (including payments to third parties).

Excluded from the quarterly report are: (a) any payments made to workers where your organisation operates PAYE and national insurance; (b) non-resident workers that work outside the UK; and (c) one-off introduction fees derived by the intermediary for introducing the worker to the client (which are not for the worker’s services).

Late and incorrect returns are subject to penalties of increasing amounts.

The returns require detailed record keeping to be maintained and for some organisations, these may be onerous and you will need to keep detailed underlying records to justify the position you have taken in making your filing. These must be filed online by registering and then using HMRC’s portal.

The Government’s website setting out all of the reporting details was published on 10 June.

The compliance report must include:

  • intermediary’s name and address;
  • workers personal details; and
  • the engagement and payment details.

Please click here for further details.

Returns are due on the 5th day of the month following the end of each quarter.

To discuss your specific circumstances please contact your usual UHY adviser or a tax adviser at your nearest location.  Alternatively, you can complete our online contact form.