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Recruitment firms face reporting challenge as a result of legislative clarification

Under the legislation, all intermediaries with a direct contractual relationship with a client must report to HMRC on a quarterly basis from 6th April 2015 or face stiff financial penalties.  In addition, recruitment firms, and their directors personally, could be liable for any unpaid or underpaid tax and National Insurance owed by all self-employed temporary workers in their supply chain.  

The umbrella employment specialist, giant group, has warned recruitment businesses that their reporting requirements are going to be onerous, albeit less than originally detailed by HMRC.

Matthew Brown, managing director of giant group, commented on the announcement. “The clarification by HMRC has meant agencies have less to do than previously thought, but the requirements are still very onerous. Agencies need to put their reporting requirements in place now in order to be able to meet the 6th August deadline for the initial report (covering the period 6 April – 5 July) and then continue to report to HMRC on a quarterly basis. The good news is that where agencies utilise compliant PAYE umbrella companies the reporting requirements are significantly reduced”

 “Utilising a PAYE compliant umbrella organisation removes almost all of this stress and the threat of being penalised. A compliant PAYE umbrella company deducts PAYE on the income received so financially there is no risk to the agency or its directors and the umbrella company should provide the agency with the report for their workers in HMRC’s specified format, significantly reducing the agency’s workload.


Note to editors

Since 1992, giant has developed and delivered groundbreaking workforce management solutions to the recruitment market:

award-winning giant umbrella is the professional umbrella employer of choice for temporary workers, freelancers and contractors. Independently voted Best Umbrella employer five times by readers of Contractor UK. 

giant precision is a suite of global back-office solutions designed to enhance your company’s performance. Through web-based services, giant precision spans HR contract management, timesheet management, payroll, billing and payroll disaster recovery.


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