HMRC reduces amount of information required on contractors

The information recruitment firms will now need to include on contractors employed via umbrella companies in new quarterly returns to HM Revenues & Customs (HMRC) has been reduced to contractor details on identity, rather than payment.
Wed, 4 Feb 2015 The information recruitment firms will now need to include on contractors employed via umbrella companies in new quarterly returns to HM Revenues & Customs (HMRC) has been reduced to contractor details on identity, rather than payment.

Following consultation, the tax authority said it has “removed the need” to report worker title, hours worked, passport number, National Identity Card Number and, where a National Insurance number is provided, the need to report date of birth and gender.
 
However, umbrella company Parasol managing director Derek Kelly claims the document left several key questions unanswered for recruiters.

In response to an enquiry made by Parasol asking whether staffing firms will need to include contractors in quarterly returns to HMRC, the umbrella company was told recruitment firms would need to report on workers employed via umbrella companies.

However, under a new specification where PAYE has been operated by an umbrella company in the UK, HMRC requires the worker's identity details but not payment details.

Parasol is also seeking clarity on whether agencies will need to report on personal service companies (PSCs). Such companies sell the work of an individual or group of individuals, and is owned and operated by that individual or group of individuals. “We hope the draft guidance and legislation will address this uncertainty,” Kelly said.

A spokesperson for membership organisation Association of Independent Professionals and the Self Employed (IPSE) said to Recruiter it told HMRC during consultation that such requirements were not necessary.

“We believe where there is a limited company contractor – someone operating through a limited company – the intermediary with reporting liability should not need to report all the personal info about the worker.

“The legislation doesn’t apply to PSCs because the worker is paid as a result of their shareholding in the limited company,” he added.

“We’ve always thought the reporting requirements goes too far when asking for this personal information.”

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