Positive news on the role of Umbrella Companies & HMRC Reporting Requirements

A report commissioned by HMRC has revealed that agencies working with credible umbrella companies are more likely to be compliant with the Reporting Requirements of the Onshore Intermediaries legislation.

This legislation was introduced in April 2014, with the objective of helping HMRC tackle serial tax avoidance, particularly in respect of income tax and NIC.
The reporting element came into force in April 2015, with employment intermediaries having to submit details of all non-PAYE workers to HMRC in quarterly online reports.

HMRC engaged leading market research company Ipsos Mori to undertake a qualitative research study of employment intermediaries in order to get a clear picture of how they are responding to and dealing with the new requirements. 60 detailed interviews with intermediaries were carried out to garner this information, including those who had filed on time and those who had filed late or not at all.

Click here to read the full report.

Promoting Awareness

Lack of awareness was cited as the primary factor behind failures to report. Interestingly, awareness of the requirements was often linked to the extent the intermediary engaged with potential sources of information, such as umbrella companies and industry bodies.
Some businesses questioned in the study specifically identified umbrella companies as being instrumental in raising their awareness. In fact, some respondents only found out about the requirements after being sent a completed report by their umbrella company and enquiring what it was.

Support and Compliance

The study highlights a clear correlation between the role of proactive umbrella companies and employment intermediaries who had filed correctly, thus avoiding stiff penalties for late and non-filing. Support from trusted umbrella partners was also singled out as making the reporting process less arduous and time consuming, particularly in cases where the umbrella company provided a report which could simply be uploaded straight to the HMRC Government Gateway.

Size matters

While the research puts larger, compliant Umbrella companies in a very positive light, the same cannot be said for some smaller providers, who were not always able (or willing) to support their agency partners with the reporting requirements. Some late filers alluded to how they had unsuccessfully chased their umbrella provider for information, which had resulted in them missing the reporting deadline.

Full support from Liquid Friday

As an FCSA member company, we are highly dedicated to compliance and shaping the umbrella industry for the better. We work closely with all of our agency partners to ensure they fully understand their obligations under the Onshore Intermediaries legislation. Not only that, we make life easy by providing comprehensive weekly reports which can be uploaded straight to HMRC.

Need help with the Onshore Intermediaries Reporting Requirements? Download our guide