Recruitment agencies play a crucial role in the employment market, sourcing and placing talent in different organisations across various industries. However, with the increasing complexity of taxation laws, recruitment agencies need to be aware of their obligations and responsibilities regarding the HMRC intermediaries report. In this blog post, we provide you with essential information on what you need to know about the HMRC intermediaries report and how it affects your business.
What is the HMRC Intermediaries report?
The HMRC intermediaries report is a legal requirement for UK recruitment agencies that place non-PAYE contractors. It was introduced by HMRC in 2015 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 to stay compliant with taxation laws. Non-compliance can result in financial penalties or even criminal prosecution. Therefore, recruiters must be aware of the rules and regulations associated with payments, deductions from wages, income tax, and national insurance contributions.
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. Recruitment agencies must submit their reports to HMRC by the 5th of the month following the end of the quarter.
Do agencies have to include all workers in the HMRC Intermediaries report?
No, 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 Raise?
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 Raise.
How can Raise help with the HMRC Intermediaries report?
Raise is an invoice financing provider that helps recruitment agencies to fund their placements. If you are a Raise customer, you will have the ability to download an HMRC intermediaries report directly from the platform. This report contains all the necessary information that you need to submit to HMRC. By using Raise, recruitment agencies can ensure that they are fully compliant with the intermediaries legislation.
Looking for help with IR35?
IR35 is another important piece of legislation that affects recruitment agencies. IR35 applies to contractors working through a limited company or other intermediary. Take a look at our "Ultimate Guide to IR35" for all the info you need.
Want to get funding for your contractors? Get started now.
Need more information? We suggest visiting this page on the UK.Gov website.
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