In the 2013 budget the UK government announced that they would be consulting on making changes to the regulations on Offshore Employment Intermediaries. This was in response to growing concerns about NIC and PAYE avoidance schemes. The consultation is now over and the legislation is now in place.
With effect from 6th April 2015 all UK recruitment consultancies will have a statutory requirement to report on all workers placed, and payments made (in relation to the supply of staff) where the worker is a UK tax resident and employment taxes and NI are not deducted at source. Therefore, where a recruitment firm pays a gross amount, irrespective of the supply model being used by the contractor, the recruitment firm will have to make a quarterly report to HMRC regarding the worker engaged and details of the payments made. This statutory requirement relates to UK engagements and non-UK engagements where the contractor is a UK tax resident.
HMRC has published details of the information required in this new quarterly return. It includes information such as name, address, limited or umbrella company details and your National Insurance number.
Having just been implemented, the effects of this new legislation on recruitment companies and UK contractors working abroad is yet to be seen. It is however something that you should be aware of if you are a UK contractor working abroad via a limited company or umbrella company, or if you are considering a change in role which will result in you working abroad as a contractor.
For more information on the new legislation and how it might affect you, please consult a tax professional.
Source: Vine 11