Employment Intermediaries Co-ordination Unit (EICU) could help you avoid automated penalties

12 April 2016

EICU Support

The EIC Unit has been designed to provide extra support and will be able to talk callers through the special reporting requirements where staff fall outside of PAYE and NIC and they can be contacted on 03000 555995.

PAYE and National Insurance Contributions (NICs)

The Government introduced tightened PAYE and NICs rules for agencies and similar businesses supplying workers to work for their clients from April 2014 which has resulted in the agency, or a similar third party business supplying workers to clients, being treated as an employer who must deduct PAYE and NIC unless it can show there is no right to supervision, direction or control (SDC) over the worker.

Special reporting requirements

From April 2015, an employment intermediary reporting requirement for people supplying workers to clients but who are outside the 2014 ‘agency’ rules was brought in. This resulted in the requirement for the intermediary to submit a quarterly return to HMRC with details of the workers being supplied and of who they are paying. Broadly speaking, if you supply two or more workers to a client and they are not taxed under PAYE then your business needs to send a return. For full detail sees the intermediary guidance.

Automated penalties

There has been a period of adjustment to allow for intermediaries to adapt to these new reporting requirements since 6 April 2015. However as from 5 August 2016, when the first quarterly information report for the 2016-2017 tax year becomes due to be filed, HMRC will begin to charge automated penalties for late returns.

Penalties are £250 for a late return, rising to £500 then £1,000 for subsequent late returns. Failure to file a return could result in a penalty of up to £3,000.

The EICU Unit can be contacted on 03000 555995.