New Agency Reporting Regulations and You

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Introduction

The government has recently changed the rules again regarding agency workers, here’s a guide to help explain these changes.

Timescales

The new changes comes into force from the start of the new tax year (April 6th 2015) and agencies will be required to submit a report for their non PAYE workers on a quarterly basis. The first report will be due on 5th August 2015.

Report Format 

  • HMRC published reporting templates on 12th February 2015.  These are intended to be used by “intermediaries” (In general agencies) in order to submit their reports.  Templates are available as both CSV and ODS file formats and thirteen reports can be uploaded at a time.
  • Agencies are advised that they should not alter the templates in any way which would affect the layout, order or headings.
    Note that start dates for agency workers are vital pieces of information which many agencies currently fail to supply.

Payment and Working Details

Agencies must also select a reason why a worker was not paid via the PAYE model from the following list of options.  Please note that if more than one reason applies, then the option that appears first on the list applies:-

  1. Self-employed
  2. Partnership
  3. Limited liability partnership
  4. Limited company including personal service companies
  5. Non-UK engagement
  6. Another party operated PAYE on the worker’s payments

In short anyone who is not a direct PAYE employee

Agencies should also include the following:

  • Unique taxpayer reference is a 10 digit code for those for those that  are self-employed or a member of a partnership
  • Work start date with client
  • Work end date with client (if there is one)

Further information relating to Payment and Working Details is available on the relevant section of www.gov.uk.

Record Keeping

Agencies must keep information, records and documents that prove that the information submitted to HMRC is correct.

Agencies are further advised to collaborate with temporary contractors, other parties involved in supplying the workers, and the clients to provide suitable evidence as to why a PAYE model was not instigated.  Records must be kept in an appropriate format at least three years after the tax year that they relate to.

Deadlines

Reporting Period Deadline Date Date you can replace a report by*
6th April to 5th July 2015 5th August 2015 5th November 2015
6th July to 5th October 2015 5th November 2015 5th February 2016
6th October to 5th January 2016 5th February 2016 5th May 2016
6th January to 5th April 2016 5th May 2016 5th August 2016

*Reports can be replaced after they have been sent, but must be submitted before the deadline of the next reporting period’s deadline.

Penalties

If your report is late, incorrect or incomplete then you could be given an automatic penalty by the HMRC. The following fines will be charged based on the number of offences in a twelve month period

  • First offence – £250
  • Second offence – £500
  • Third and later offences – £1000

If the time since your last penalty has been over twelve months, you will only be charged £250 for your first offence in the new twelve month period.

Where there is continued failure to send reports or send reports late you may receive a penalty every day that you do not send the report.

There will be a new appeal process for these new penalties.

For incomplete and incorrect reports, manual penalties may apply on a case-by-case basis.

If you replace a report before the deadline of the next reporting period without being asked to, HMRC will consider this when they decide if you have to pay a penalty.