Finance Bill/Intermediaries Legislation 2014

If you are an ‘intermediary’ business who provides Contractors and workers to your clients, you need to regularly report to the HMRC about the ‘workers’ you provide, who you do not pay PAYE/NIC’s for, from the first Quarter of 2015 (6th April – 5th July).

Your first report needs to be with the HMRC by 5th August 2015. Here is information on how to file your reports under this new legislation – https://www.gov.uk/government/publications/employment-intermediaries-reporting-requirements/what-the-changes-mean

If you need any help in determining your liabilities/obligations under this legislation (also called the ‘false’ self-employment legilsation) we can help!

From 6th April 2014, workers in this situation will have tax and employee National Insurance Contributions (NICs) deducted at the source from their pay by the ‘intermediary’. The intermediary will also have a new liability to pay employer NICs.

The Government estimate that the new legislation will affect around 250,000 people and will increase tax and NIC intake by around £520m next year – some commentators, however, doubt these figures!

In October 2014 it was reported that the construction industry had been particularly badly hit by the legislation, with 10% of firms that were surveyed saying they had become less competitive when tendering for work, and 60% of firms saying they expected labour costs to rise. At the end of November 2014 the construction union UCATT said that tens of thousands of workers in the industry had been forced to work via umbrella companies and mounted a demonstration on a road-widening project in Wales. In January 2015 the Welsh Government moved to ban the use of umbrella companies on this construction project – so workers would be employed directly through PAYE by the construction company or the employment agency.

In addition in October, staffing firms confirmed they had introduced additional checks for suppliers such as umbrella companies to ensure they met compliance standards.

In April 2015, concerns were expressed by Recruiters bodies that many affected businesses are unaware of the new Act and it’s reporting requirements; and that industries such as the events industry may not even be aware that the new rules apply to them as they may not be aware that they are classed as an ‘intermediary’. We look in more detail at how you work out if you are an employment intermediary business here – as the scope is very wide.

Contact us for advice on your obligations. Many business may not be aware that they are ‘intermediaries’ and have reporting requirements – basically if you supply labour to another business then you could be covered!

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