HMRC has publicised its plans to make changes to the way records are reported for recruitment companies. New regulations published last week will now mean that all agencies will need to provide the Revenue with details of all ‘workers’ they are involved with.
Recruitment companies will need to inform HMRC of information on contractors employed via umbrella companies, in quarterly updates. However, only personal details will need to be supplied, not any payment details, as this will be provided by umbrella companies via their Real Time Information (RTI) submissions. Nevertheless, the gross amount paid gross to the umbrella company and all expenses will need to be included.
This means that HMRC will now know which agencies are working with which umbrella companies and whether or not PAYE has been correctly applied, and of course, with all HMRC requirements there will a monetary penalty system in place for any discrepancies.
The new requirements have come under heavy criticism by freelancer and self-employed group, IPSE. Andy Chamberlain, IPSE Senior Public Affairs Manager, has criticised HMRC by saying the changes aren’t good enough and he believes it will distort the contractor market place. He said “We are pleased to see that some personal details such as title, hours worked and passport number are no longer required. These are important concessions but they do not address the inherent impropriety of the regulations, particularly with regard to the way they impact limited company contractors.”
It seems generally that agencies have agreed with Mr Chamberlain that the changes will be a burden, but there is a consensus that this could have been a lot worse. Unless there are any further additions, these changes will be coming in to place April this year.
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