HMRC define an intermediary as a person who makes arrangements for an individual to work for a third party or be paid by the intermediary for work done for a third party. The most common type of intermediaries are employment agencies.

Reporting requirements

Intermediaries are required to report all details of workers who they do not pay as a PAYE employee to HMRC on a periodic basis. The intermediary can decide how often to send the reports providing it has been done so at least once every 3 months. Sending the reports is the responsibility of the intermediary that has the contract with the end client. The reports can be submitted online using HMRC’s template and via their online services portal.

Personal service companies (PSC)

Contractors operating via their own limited companies that only supply their own services to a client will not be required to report anything.

If the work with the client is arranged via an agency and a contract is in place they will be included on the report submitted to HMRC by the agency. Contractors may find agencies are now requesting more personal details of the director including NI number and unique tax references before issuing a contract.

The contractor’s limited company will only be deemed as an intermediary with reporting requirements if the PSC itself has a direct contract with the agency and they are supplying more than one worker. As an example this could be where the limited company also supplies a substitute or an additional worker to the client.

If the limited company pays the other worker by operating PAYE on them then no reporting requirement exists. However, if the PSC does not operate PAYE on them the intermediaries reporting legislation will apply. The limited company will need to ensure it has collected all details of the other worker and will need to submit the information to HMRC within the required timeframes.


You don’t have to send HMRC reports if all the following statement are true. You:

  • are a UK employer
  • supply workers to provide their services to end clients and nobody else is involved
  • operate PAYE when you pay those workers

For contractors it is crucial to be aware of the legislation, establishing if the PSC is an intermediary and complying with the reporting requirements. Otherwise contractors may find themselves with fines and penalties from HMRC. Furthermore if they fail to supply all required information to any agencies they contract with that have a reporting requirement as an intermediary of the PSC’s they may find they are in breach of contract or worse still may see themselves not being offered further work from the agency.

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