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- Nick Elvin
Intermediaries will not be required to report payment information for umbrella workers, HMRC has confirmed.
HMRC has clarified the situation following ongoing consultation with the Association of Professional Staffing Companies (APSCo). The association said there had been much confusion, as well as incorrect information circulating, regarding changes to the reporting system, which came into effect on April 6.
The HMRC reporting system requires intermediaries to give the reason why PAYE has not been applied to a worker’s payments; there are a number of options and the intermediary needs to pick the first one that applies from a list comprising:
A – Self employed;
B – Partnership;
C – Limited liability partnership;
D – Limited company;
E – Non-UK engagement;
F – Another party operated PAYE on the worker’s payments.
Samantha Hurley, head of external relations at APSCo, said: “We very quickly realised that the final two categories on the list would never be ticked as the worker would, certainly in the professional sector, always come under one of the first four categories.
“We discussed this with HMRC at length and they confirmed to us that umbrella workers would come under the category of limited company. However, this has been interpreted incorrectly by some to mean that payment details must now also be reported for umbrella workers.
“APSCo can categorically confirm that this is not the case and we have had confirmation from HMRC that there is no legal obligation to report the payment – just the worker identity details, the company name, address and registration number, and the start/end dates of the assignment.”
Umbrella employment firm, giant group, welcomed the clarification. Matthew Brown, managing director, said: “We’re encouraged to see that HMRC has clarified its intermediary reporting requirements as there was some initial confusion.
“They revealed that umbrella workers would in fact come under the category of limited company (D), although they would be happy if intermediaries reported them under ‘another party operated PAYE’ (F). However some interpreted this to assume that payment details must now also be reported for umbrella workers.
“This isn’t the case and the only obligation an intermediary has is to report the worker’s identity details, umbrella company name, registered address, registration numbers and the start/end dates of the assignment being undertaken.
“Effectively, HMRC are saying that intermediaries do not need to report payment information where the PAYE RTI return is being fulfilled elsewhere.”
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