Reporting requirements Under OIL: what you need to know

This year’s increased pressure from HMRC continued in April, when the new reporting requirements of the Onshore Intermediaries Legislation came in to force. A considerable burden for recruiters, the new law demands agencies report quarterly to HMRC on all gross payments made to, or on behalf of, temporary workers. First returns are due by 5th August and need to cover the period 6th April to 5th July 2015.

What this means in practice is that the last intermediary (in most cases the agency), has to submit a detailed quarterly return of all payments made, relating to every worker supplied to hirers, where PAYE has not been applied. The amount of confusion amongst agencies implies the government could have done more to prepare the industry for the new guidelines and processes, which were finally published in February this year.

For some, completing the complex online reports may present a challenge, due to the number of suppliers they work with combined with the nature of the data needed, such as date of birth and NI number, which might not be forthcoming from some workers – especially those operating through their own PSCs (Personal Services Companies). Agencies making the return need to obtain the detailed information from all suppliers (including PSCs) in the supply chain. With only 30 days in which to consolidate the data and file reports, this may prove to be no easy task.

HMRC had originally intended to reject incorrect or incomplete reports but after extensive lobbying, it has agreed that a report may be amended at any time until the following report is due. This at least gives three months in which agencies can correct any errors or source missing data. A factor that may ease the pain for some.

To make the whole procedure easier going forward, recruiters need to implement the correct processes to obtain details about every contractor they engage with and ensure umbrella organisations can supply them with data in the specific format HMRC demands.

See also Anderson’s Guide to HMRC Reporting

Key facts:

  • First return is due by 5th August 2015
  • Reports must cover the period 6th April to 5th July 2015
  • Payment data needs to follow pay months, not calendar months
  • Other details to be reported include worker’s name, gender or date of birth, NI number and to whom the payment has been made
  • Reports may be amended at any time until the next report is submitted
  • Different fines will be awarded for incorrect or incomplete reports, starting at £250 rising to £4,000 in any one year
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