New legislation has been implemented to prevent intermediaries and individuals using deceptive methods to reduce employment tax and avoid the provision of employment rights. Such methods include the portrayal of false self-employment and the supply of workers from an off-shore location.
Intermediaries are organisations that make arrangements for someone to work for a third person, they help to provide individuals with regular work, giving workers the opportunity to choose whether to accept or decline offers of work. It provides organisations with a good way of finding workers for temporary contracts and at short notice.
The new rules ensure that the right amount of tax and National Insurance is paid by workers provided through intermediaries and to reduce the unfair commercial advantage to those abusing the system.
If you supply workers to an organisation/ client (end user) and have a contract with that end user to pay you for the worker’s services in the UK, then you will be affected by the regulations.
HMRC will now require intermediaries to return details of all workers that they place with end users where they do not operate a PAYE scheme on the worker’s payments. The report will include the worker’s details, the payments made to that worker and the engagements that the worker has worked on during the period the report covers. This report must be sent to HMRC at least once every quarter regardless of whether any workers have been supplied during this period.
This can be uploaded online using the HMRC online service.
One person limited companies or personal service companies that only supply an end user with one worker don’t have to send reports to HMRC. Examples of other workers that are not included are employees, actors, singers, musicians and entertainers and those who are not required to pay tax in the UK.
If you require further information on this topic and advice on whether you are required to submit such a report then please do not hesitate to contact a member of the team on 0207 426 0382 or at enquiries@acitylawfirm.com
March 2017
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