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Not so long ago, the government introduced new legislation concerning PAYE, which affected all intermediaries, with recruitment agencies included.
An intermediary is an individual or agency that makes arrangements for a person to work for a third party. This is something your accountant should have informed you about. The new rules mean that all intermediaries now have to report commitments in regards to non-PAYE employees, and these must be fulfilled every quarter.
In instances where you do not operate PAYE on the workers’ payments, you need to return details to the HMRC. While this is required every three months, it is up to you how frequently you send and upload documents.
The new legislation is a clear message from the government that they are cracking down on those who are cheating their way out of paying taxes through reporting as non-PAYE, for example, as self-employed.
It’s just one of the tax changes the government has made lately. You can learn about making tax digital, which is another, online. It is the responsibility of intermediaries to take action and comply with the new rules that are in place.
But, how do you go about it? Well, the first thing that needs to be done is that you need to get to grips with the legislation that is in place. There are many ins and outs, and so it would be wise to book an appointment with your accountant, or if you do not have one, now is the time to invest in fixed fee accountancy services.
Once you have got to grips with the new reporting rules that are in place, the next thing to do is demonstrate proactivity. You need to show that your business is aware of what is required, and that you are taking active steps to make certain that you are compliant. You may think that it is better to hide your head in the sand and act none the wiser if questioned about the regulations, yet this is not advised. You need to show yourself as a credible and trustworthy business, and the only way to do this is to make an effort.
There is no denying that putting in the effort to report all of your non-PAYE employees can be time-consuming. However, failure to do this could bring about much bigger problems, and it is not worth the risk. After all, this is your responsibility, since you have the duty to provide all of your customers with the correct information about the workers you deliver.
When it comes to the payment status of workers, you need to supply sufficient information, and failure to do so could tarnish your reputation and you could miss out on business in the future. Why? Well, if you do not provide the proper information to HMRC, then they will treat the client as your worker’s employer for both national insurance and income tax purposes, and, needless to say, this is something your customers aren’t going to be very happy with.
To conclude, if you run an employment agency or any other type of intermediary service, you need to be concerned with the new legislation that is in place. Failure to do this could result in serious consequences for your business.
This is a collaborative post.