Employment agencies must produce quarterly HMRC report on non-PAYE employees

From 6 April 2015, “employment intermediaries” are required to send quarterly reports to HMRC about agency workers they place with clients where they do not operate PAYE on workers’ payments. “Employment intermediaries” includes employment agencies.

This new legislation has been introduced in a bid to prevent “abuse” of intermediary status, particularly through false-self employment and also supplying UK workers from an offshore location.

To ensure compliance, employment agencies must provide HMRC with a report every three months containing details of any relevant worker, payment details and a reason why they did not operate PAYE. 

HMRC have provided an online service to upload and submit reports, together with guidance on the new rules. These can be accessed here.

Following the end of the first three-month reporting period (6 April to 5 July 2015), employment agencies shall have until 5 August 2015 to submit their first report to HMRC.

Employment agencies would be wise to familiarise themselves with their new obligations, as failing to submit a report, or submitting an incorrect or late report, may result in a financial penalty.