HMRC reduces intermediaries reporting requirements

Nick Elvin

HMRC has revised the planned new intermediaries reporting requirements, due to come into effect on April 6, following its recent consultation.

The requirements would mean recruitment firms having to collect, verify and report sensitive information about self-employed workers and company directors to HMRC.

The Government says the measures will help tackle false self-employment. However, a number of business organisations have criticised the proposals, saying that, while some reporting is needed, these obligations will create a significant administrative burden and introduce risks in handling personal data, including age, gender and National Insurance number.

Now HMRC has now 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.

The Association of Professional Staffing Companies (APSCo) says it is pleased the Government listened to its concerns. Samantha Hurley, head of external relations and compliance said: “I welcome the fact that, following our strong response to HMRC, it has listened and reduced reporting requirements for intermediaries. Of particular concern to APSCo was the intended requirement for our members to collate sensitive personal data and information (such as date of birth and gender), which had the potential to give rise to discrimination claims.

“While we do not underestimate the difficulties our members may encounter getting NI numbers from personal service company contractors, we believe it to be far better than the original proposal. It is, however, vital that intermediaries are aware that these changes do not remove the need for careful consideration surrounding the data security of information coming into, and being stored, by their business.”

IPSE – the association of Independent Professionals and the Self Employed – says the changes do not go far enough, and will be burdensome for businesses.

Andy Chamberlain, senior public affairs manager at IPSE said: “The original proposals required intermediaries to report on individuals for three years, even if the engagement only lasted a few weeks. This was ludicrously excessive, and we are pleased this has been dropped to one year.

“We are also pleased to see that some personal details 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.”

IPSE believes where the ‘worker’ operates through a limited company, the reporting should be restricted to company information only. This would reflect the business to business nature of the contract with the agency and it would be in keeping with HMRC guidance on how the legislation interacts with these professionals.

Chamberlain also says the new regulations will prevent professionals from subcontracting: “Perhaps the most worrying aspect of this legislation is the impact it will have on those independent professionals who subcontract out work to others. The rules could lumber the original contractor with the reporting burden. Subcontracting out work can be beneficial to all businesses in the chain yet these regulations will strongly discourage it, leading to a distortion in the marketplace.”