Agencies and false self-employment

On the back of the Autumn Statement, HMRC has issued a consultation to establish agencies (the first in the chain) as responsible for the worker’s tax and national insurance contributions, in a bid to end false self-employment.

Will this get traction? Well I think so.

Reading through the consultation document, the intent is clear. While this will heap yet more administration onto agencies it will provide HMRC with a clear understanding of who is contracting and using which model – for the very first time.

The mechanics of it are now becoming clear – the agency will have to submit a quarterly return, similar to RTI submissions. This will identify who is doing what. HMRC can then put together a summary of each provider and investigate those models promoting 85/90% returns. About time too!

What is good and encouraging is that PSCs and Umbrellas are clearly outside this scope and workers using these models will not be targeted.

So for agencies, having a PSL of compliant providers becomes even more important, especially as HMRC is looking to “transfer” any HMRC debt to the agencies should the providers not cough up…

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