On April 6, 2015 new legislation comes into effect for recruiters and employment intermediaries.
OK, what does that mean for me?
The new rules mean that recruiters need to report to HMRC any worker that falls outside their own PAYE payroll. The first report relates to information produced in the three months from April 2015 until 5th July 2015 is due to be with HMRC by 5th August 2015. Recruiters need to provide this information by law, and must use HMRC’s standard templates to report this information.
As always, forest is at the forefront of helping our agency clients understand and comply with the ever-changing legal landscape. We were one of the first businesses in the UK to go live with RTI in the HMRC pilot, and as the UK’s highest qualified umbrella, we’re continuing our commitment to compliance by making reporting easy for our recruitment partners.
What’s the motivation behind the changes?
The government and HMRC have been introducing new legislation at a rate of knots. Onshore and offshore intermediaries being some of the most recent. This change is now about policing those new rules. To put it simply, HMRC wants to understand how everyone is paid, to start policing the unscrupulous operators in the market. Loans schemes and EDMs are on the radar for HMRC, as well as offshore umbrellas.
I run a recruitment agency – how does forest help me?
Simple – we’ll handle the reporting for you and provide you everything you need, in the right format, on time, for you to provide to HMRC.
And what if I get it wrong?
If your report is late, incomplete or incorrect you can be fined.
£250 – first offence
£500 – second offence
£1,000 – third and later offences
What are the key dates for reporting?
6 April to 5 July – report due 5 August
6 July to 5 October – report due 5 November
6 October to 5 January – report due 5 February
6 January to 5 April – report due 5 May
And what do I need to send?
Don’t forget, forest will do all this for you – but the report will include:
Your full name, address and postcode
The worker’s personal details
The engagement and payment details
And then the following worker details:
Full name, address and postcode
NI (if they have one and you don’t know their date of birth and gender)
Date of birth and gender (if they don’t have a NI number)
Along with the payment and working details:
You must select the reason why you didn’t operate PAYE on the workers payments from these options:
C: Limited liability partnership
D: Limited company including personal service companies
E: Non-UK engagement
F: Another party operated PAYE on the worker’s payments
The report should also include:
Unique taxpayer reference – if they are self-employed or a member of a partnership
Start date of work with client
End date of work with client – if there is one
For any payments that aren’t reported to HMRC using RTI, the report must also include:
Total amount paid for the worker’s services
Whether or not VAT has been charged on the payment
The full name or trading name and address of who the intermediary paid for the worker’s services
Company registration number if the worker was engaged to do the work through a limited company (option D)
And what records need to be kept?
You need to keep proof that what you sent to HMRC was correct. HMRC may ask you for this information. This information should include any documents that show why you didn’t operate PAYE on the worker’s payments, and documents need to be kept for at least 3 years after the end of the tax year that they relate to.
Where can I read more?
You can get the detail direct from HMRC by clicking here… But the important thing to know is that as an agency client of forest, we have you covered. We’ll do the work, keep track of everything and we’ll make sure your reporting goes smoothly, allowing you to continue to grow your business. Just contact us today to join hundreds of other UK agencies who benefit daily by partnering with forest