New Reporting Obligations on Employment Businesses: Information for Contractors Working through their Own Limited Company
From 6 April 2015, employment intermediaries are required to collect, store and report to HMRC the personal information of workers for whom they do not deduct PAYE and national insurance. This includes contractors operating through their own limited company. The Association of Independent Professionals (IPSE) and the Recruitment and Employment Confederation (REC) have jointly developed this factsheet to explain to contractors the information that is required.
What information is required from Limited Company Contractors (LCCs) by recruiters?
Employment intermediaries are required to report the following:
- The name, registered address and Companies House registration number for your company.
- Your first name and surname.
- Your private address, that is where you live.
- Your national insurance number, or if you do not have one, your gender and date of birth
- (please note this is not a choice between national insurance no. or gender and date of birth).
- The start and end date (if known) of your assignment.
- The amount that the LCC has been paid for your services (inc. whether VAT has been charged).
What will happen with the information?
The employment business or vendor which has the contractual relationship with the end client is required to send this information each quarter to HMRC via an online reporting system. This means that the employment business you supply your services to will be requried to pass your information to other employment intermediaries higher up the supply chain. These intermediaries are also required to retain this information for at least three years.
If you have any concerns about data security, you should discuss this with the employment business you have a contract with.
Can LCCs refuse to provide the information?
Employment businsesses are under a statutory obligation to report the information, and will be fined if they submit incomplete reports, so refusing to provide your details could jeopardise your contract. Many recruiters now include the requirement to provide this information in their contracts with LCCs.
What if my details change?
If your details change, for example you change address or start working through a different company, you need to let your employment business know.
What happens if I subcontract work?
If you have subcontracted all or part of the work obtained through the recruitment agency, you need to provide the agency with the details of all the workers who have performed work under your engagement. That means that if you subcontract part of an engagement to another party e.g. another limited company or a sole trader, you will need to provide your details, the details of the person you subcontracted to and the entity (if any) they worked through.
What is IPSE and REC’s view on the requirements?
IPSE and REC joined forces to fight the reporting requirements. We argued that these regulations would be burdensome for businesses and would interfere with the supply chain. As a result of our actions, a number of compromises were secured. Unfortunately however the statutory obligation to report the personal details of limited company contractors remains and non-compliance will result in fines for the recruitment businesses.
Where can I go for further information?
REC Members: https://www.rec.uk.com/legal-resources/legal-guide/