How will this affect professional contractors?
With effect from 6th April 2015 all UK recruitment firms will have a statutory requirement to report on all payments made (in relation to the supply of staff) where they don’t deduct employment taxes and NI at source.
Therefore, where a recruitment firm pays a gross amount, irrespective of the supply model being used by the contractor, the recruitment firm will have to make a quarterly report to HMRC regarding the worker that the payment relates to, and in some circumstances details of the payments made.
Additional personal information required
HMRC has published details of the information required in this new quarterly return. This includes information, which Nicoll Curtin already hold about individual contractors, such as name, address, and supply model details (i.e. whether personal service company, umbrella company or self-employed).
There is also a statutory requirement for some additional information, which Nicoll Curtin will not commonly hold (unless the contractor is working with children or vulnerable adults) as follows:
- Worker NI number or worker date of birth and gender; and
- Worker UTR (where self-employed, director, or in a partnership)
How this affects professional contractors?
If you supply services via a UK recruitment firm, and you are paid gross for those services – in other words the recruitment firm does not deduct tax and NI from payments made to you – this new reporting requirement will affect you.
You will find going forward that we will ask to provide the information stated in a. and b. above.
This is very sensitive personal information, and Nicoll Curtin will provide you with assurances regarding the security of the information we hold.
Can you refuse to provide this information?
Nicoll Curtin has a statutory duty (from April 2015) to provide this information to HMRC on a quarterly basis.
It is likely that you are contractually obligated to provide any information required by us to fulfil our statutory obligations. However, if you choose not to provide this information it is likely that Nicoll Curtin will be unable to supply your services to clients.
This is because withholding the required information would cause Nicoll Curtin to be in breach of a statutory obligation, which carries penalties for the business.
What will happen to the information you provide?
Nicoll Curtin has a statutory obligation to provide a ‘nil’ return regarding each contractor placed for 1 year after the end of the assignment. Therefore, it will be necessary for Nicoll Curtin to keep your data for at least one year after you’ve completed your assignment(s). If HMRC disputes the information provided it may be necessary to keep the information beyond this timeframe.
On a quarterly basis your information will be reported to HMRC, we believe via the Government Gateway.
Where to find the legislation/information
This new statutory obligation can be found in the new section 716B of ITEPA, which gives HMRC the right with regard to Chapter 7, Part 2 of ITEPA 2003 (the treatment of agency workers) to require intermediaries to keep and preserve specified information, records or documents for a specified period; and to provide HMRC with specified information, records or documents within a specified period or at specified times.
Although this reporting requirement applies only to the intermediary with the direct contractual relationship with the client, it will be necessary for that intermediary to obtain the required information from further down the supply chain. Therefore whichever intermediary you or your business contracts with, it is likely that they will require this information from you.
The reporting process and requirements are likely to change throughout the next few years, we are committed to let contractors know about any adjustments.
Want to find out more?