Last spring HMRC made changes which had a significant impact on recruitment agencies and contractors working for them. Next year more regulations will come in to force which recruitment agencies and their staff will need to understand and adhere to. It will be more important than ever for agencies to ensure that anyone they treat as self-employed can legitimately be considered as such.
From the beginning of the tax year (April 6th) recruitment agencies will have to gather information on any candidates on their books where neither they nor an Umbrella company are administering PAYE (i.e. they are being treated as self-employed). This information will be required so that from the 6th July they are able to send a report to HMRC detailing all individuals they have placed on assignment where PAYE is not being deducted.
Agencies will have to report on this quarterly. The deadline for submission, to HMRC, of the first report is 5th August 2015. (This will cover the 3 months from the beginning of the tax year, so 6th April 2015 – 5th July 2015). The information required is quite extensive and recruiters will need to be aware of the facts and detail required to submit a full report which meets HMRC’s requirements.
As well as the usual personal information about workers such as their name, address, passport and NI number agencies will need to provide information about how a worker was engaged to do his or her work – e.g. self-employed together with details of why the agency does not think PAYE was applicable.
They will also need to provide details on the start and finish dates of each assignment, how much the individual was paid, (if this payment included VAT) the number of hours they worked and the full name or trading name of the recipient of the payments along with the company registration number if the payment was made to a Ltd company.
There is no doubt that this is going to increase the burden of administration for many recruitment agencies, it should also cause agencies to check again that the contractors they allow to be engaged on a Self-Employed basis are correctly assessed as such. This reporting will mean that HMRC have a virtually live feed of information regarding who is enjoying Self-Employed status.
Agencies who submit late reports or reports with missing or incorrect information could be liable for fines. HMRC are yet to announce the level of the fines.
If you have any questions about the new regulations please contact your Account Manager for advice and we’ll be happy to assess your workforce and advise accordingly.
