13.06.17 HMRC guidance on intermediary reports has been updated

Since the introduction of the Income Tax (Pay As You Earn) (Amendment No.2) Regulations 2015, intermediaries must send a report, at least once every quarter, which details workers they’ve supplied to clients where they have not operated PAYE on those workers’ payments and the reason for this. This is part of HMRC’s aim to decrease false self-employment.

HMRC’s guidance, “Employment intermediaries: reporting requirements”, has recently been updated to include paragraph 4.3 which sets out a process for appealing against penalties issued when reports are filed late, incorrectly or when an intermediary has failed to file a report altogether.

The new paragraph sets out the process of appealing a penalty. The appeal must be submitted in writing and sent to the address on the penalty notice. It should also quote the charge reference, customer reference and name of the company on the letter. The letter will subsequently be reviewed and a response will be provided within 30 days of receiving the letter. Action to collect the penalty charge amount will be suspended until a decision is made.  

If the individual or company still disagrees with the decision made, they can request an independent review or produce more evidence. Once a final decision has been made no further appeal can be made and HMRC will chase collection of the outstanding debt amount.

To read the full guidance on intermediary reporting, click here.

Aspire Comment

Penalties linked to the intermediary reporting can amount up £1K a year plus daily penalties up to £600 per day. Therefore, it is important that you understand your obligations to ensure reports are filed correctly and on time, where required, to avoid any unnecessary penalties.

It is important that HMRC have introduced an appeal process against penalty notices to ensure that intermediaries have this right to use when needed, however this also demonstrates that HMRC must be issuing a number of penalty notices for the to feel the need to introduce this change to their guidance.

We are seeing HMRC begin to analyse use the information on these reports and write to intermediaries who have large numbers of self-employed workers, therefore it is important that you are comfortable with the employment status of your workforce and lack of supervision, direction and control if you are not applying to PAYE to a worker’s payments.

If you are unsure whether you need to be submitting intermediary reports, or would like Aspire’s help with appealing a penalty, please feel free to give us a call to discuss how we can help.