HMRC intermediaries. What you need to know
If you’re in recruitment, you’re probably already aware of the HMRC legislation for off-payroll working, but what do recruiters actually need to know about being an intermediary? This blog provides answers to your key questions so you can make sure you and any contractors you’re working with are following compliance guidance. Whether these changes directly affect your business or not, arming yourself with the basic knowledge is always a good thing! So let’s dive in…
What is the HMRC Intermediaries report?
The HMRC Intermediaries report is a requirement for UK recruitment businesses that place non-PAYE contractors. It was introduced by HMRC in 2015.
What is the purpose of the HMRC Intermediaries report?
The purpose of the HMRC Intermediaries report is to ensure that all payments made in relation to the supply of staff where employment taxes and NI are not deducted at source are reported to HMRC.
Why is it important for recruitment agencies to understand HMRC intermediaries requirements?
Recruitment agencies must have a thorough understanding of HMRC’s intermediaries requirements in order to stay compliant with taxation laws. Agencies should be aware of the rules and regulations associated with payments, deductions from wages, income tax and national insurance contributions. By familiarizing themselves with intermediaries legislation, recruiters can ensure that taxes are paid correctly and all statutory rights are met for their contractor’s employees. This knowledge is essential for both the agency and workers to remain legally compliant and avoid any potential financial penalties or criminal prosecution.
What do UK recruitment firms need to report under the HMRC Intermediaries report?
UK recruitment firms need to report any worker that falls outside their own PAYE payroll. They need to include the following details:
- Contractor’s name, address, date of birth, etc.
- PAYE reference.
- National Insurance number.
- How the contractor was engaged during the period (i.e. was he/she working via a ltd company)
- The duration of each assignment.
- Details of the contractor’s limited company (e.g. company registered number).
- How much was paid to the contractor.
When are the deadlines for submitting the HMRC Intermediaries report?
The information needs to be submitted quarterly. If you are a Sonovate customer, you can view more details here.
Do agencies have to include all workers in the HMRC Intermediaries report?
Agencies don’t have to submit any details of workers who are their own employees or where the payments have already been included as part of a PAYE Real Time Information (RTI) submission by any other organisation.
Do UK recruitment firms need to report placements funded through invoice factoring providers such as Sonovate?
Yes, UK recruitment firms need to report any contract placements they’ve self-funded in addition to placements funded through an invoice funding provider such as Sonovate.
If you are a Sonovate customer, you will have the ability to download an HMRC intermediaries report directly from our platform. Click here for more information.
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Need more information? We suggest visiting this page on the UK.Gov website.