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Intermediaries and Personal Services Companies

Intermediaries and Personal Services Companies

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We received an agent update today stating that employment intermediary returns are due today. Has anyone been completing these forms for their clients as we are unsure who these apply to?  Are they for Agencies only or does it also apply to any personal service companies that use sub-contractors to fulfil customer contracts?    For example, company A provides services to company B.  To improve timescales company A brings in a sub-contractor not covered by PAYE.  This sub-contractor subsequently works on the contract provided to company B. Is company A required to submit an employment intermediary return?  As timescales are understandably tight, any advice would be welcomed.

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By djn24
05th Aug 2015 11:34

Just about to ask the same question!

1. Does this apply to our Ltd companies who engage subcontractors (sole traders and Ltd companies) to complete projects for their clients?

2. One of our clients customers has informed them that they need to make an intermediary report to HMRC.  They have asked for NI numbers etc for all the sub contractors that my client uses- Surely my client does not need to provide that as my clients customers is paying my client to do the work so they wouldn't even know if my client uses subbies or not?

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By Wycher
05th Aug 2015 12:16

Also interested

I was just looking at this and whether it applies to construction companies who use subbies on clients sites?

I would argue that the subbies are not working for the client but for the company and are not normally billed onward on an hourly rate.

Would be interested in people's views.

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By JimH
05th Aug 2015 12:34

Look up the guidance
And see what it says about PSCs that place workers. Does that give you your answer?

https://www.gov.uk/government/publications/employment-intermediaries-rep...

the only client we have who's impacted by this is the classic case: a recruiter, now reporting for the IT contacters it provides to industry.

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By Martine1
05th Aug 2015 12:55

Guidance Unclear

Hi JimH,  It was that document that caused us to query the situation in the first place.  The 3rd paragraph under section 2 'If a personal service company supplies more than 1 worker, including any subcontracted workers, it will be acting as an intermediary and will have to send reports for each reporting period', this would seem to imply that any company that provides subcontractor labour towards the completion of a contract should be filing the returns.

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By Wycher
05th Aug 2015 12:48

Cleaning Companies

I think the type of firm it may catch is smaller cleaning firms that provide household cleaning, if they use self employed individuals.

Trouble is these firms are often very small and probably not aware of the legislation.

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By JCresswellTax
05th Aug 2015 13:06

My thoughts

Are that there is a difference between 'supplying a worker' and 'fulfilling a contract'.

If the contract is to provide workers, you are caught.

If the contract is to supply a service and you choose to use subcontractors to fulfil this obligation, you are not caught.

I have to say that this is my own common sense approach to this and may be total rubbish - but that is the basis I have decided to work on.

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By JimH
05th Aug 2015 13:32

Likewise
Sorry, Martine1, for missing your point. I concur with J Cresswell who I think sums it up well. Webinars and writings give me no reason to think that the reporting is stretched to include all subcontractors.

Maybe HMRC are going to be bombarded with a deluge of unnecessary reporting as I think happened when Form 42 came in for employment related securities.

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By EW110
05th Aug 2015 13:46

On a recent course I asked about who was caught with reference to a particular client.  They do specialist consultancy type work using a mixture of own staff and sub-contract workers - lecturer believed not necessary to report where, as J Creswell says, they were completing a contract regardless of which workers used.  However they had provided two workers recently who work via their own limited companies where the end user (A plc) wanted these people but they weren't set up as suppliers whereas my client was - therefore as supply of a worker was different to work they normally do for A so caught and I have done report for these 2 workers only.

However I have a question on the Report.  It is reporting payments and one was paid post 5 April but work was completed pre 5 April but it classes it as an error putting an end date of pre 5 April but says have to put an end date if the engagement has ended.  The guidance suggests can report in period they worked in (which is pre-reporting requirement) but ESM2170 clearly states report in period paid not invoiced etc.  Shall I just leave end date blank?

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