Employment Intermediaries Returns
Employment Intermediaries Returns are yet another new requirement in the whole scheme of payroll obligations.
Introduced on 6th April 2015, with the first returns falling due on 5th August 2015, these returns impact on intermediaries or agencies who supply workers to an end user, particularly applying to the payrolls for recruitment agencies.
A quarterly HMRC return, the need for these returns exists irrespective of the fact that payments received by the workers have not been subject to PAYE and NIC. And failure to respect your obligations could see you facing a penalty of up to £1,000 as well as the possibility of further penalties based on any tax due on incomplete or erroneous returns.
A complex area
Because the different scenarios where Employment Intermediaries Returns are required and when they are not is complex, this article is not intended as a complete guide. Instead, our aim is to make you aware of this new legislation and to give you sufficient information to enable you to establish whether or not you may be caught within this change and, if so to take the necessary action. The bottom line is, if you are in any doubt whatsoever, you are strongly advised to seek help.
A simple overview
Establishing whether you or your business may be affected by this change in legislation is relatively complex. However, the rules can be most simply summed up as potentially applying to any business, big or small, in any sector involved in the supply of workers to an end client. Clearly agencies will be affected, but equally anyone who has a contract with a client to provide more than one worker’s services to that client will also be affected. It doesn’t matter if the worker’s services are provided in the UK or overseas, but the worker must resident in the UK for the legislation to come into play.
In any situation where there are multiple suppliers, the obligation to report lies with the principal intermediary (intermediary one) and any other intermediaries involved must cooperate with intermediary one so they can submit the return accurately and timeously. However, once again, there are a few exceptions to this. One is where workers supplied are providing their services at sea in the oil and gas industry, wholly on the UK continental shelf. What’s more, the likes of actors, entertainers, models etc who work from home may also benefit from special exemptions.
Review your unique situation
So as you can see, whether you will be required to submit a report or not is complicated. By means of example, certain types of secondment may call for a report, some may not. And in order to confuse matters even further, there are certain situations that might well call for the application of agency rules from April 2014 rather than an intermediaries report.
So as you can see, it is essential that you review your own unique situation to ascertain whether or not you may need to complete an Employment Intermediaries Return. If you do, like anything else associated with HMRC, it is advisable to set up an appropriate procedure to gather the information you need and keep it in an easy accessible format ready to make your quarterly return.
HMRC and Employment Intermediaries Returns
NOTE: Within HMRC they have created a dedicated unit to this and it is not unthinkable that they could start to scrutinize this area more closely.
If you think you may be affected by Employment Intermediaries Returns and would like some help, why not get in touch with us at Payplus? We are fully conversant with when the rules apply and when they don’t as well as the procedures required to ensure you stay compliant; so don’t hesitate to ask.