Employment intermediaries: reporting requirements

By Tolley

The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Employment intermediaries: reporting requirements
  • Introduction
  • Who is affected?
  • More than one intermediary involved
  • Content of the report
  • Form of the return
  • Timing
  • Penalties


As from 6 April 2015, a reporting obligation applies to employment intermediaries, requiring them to make quarterly returns to HMRC in respect of the workers they use to supply services to their clients unless they operate PAYE in respect of those workers. This reporting requirement is embedded in the PAYE regulations, despite applying to intermediaries who may have no direct employees, no PAYE scheme and no current exposure to the PAYE regime. The HMRC guidance is not however in either the PAYE or EIM manual, but at ESM2070 onwards.

SI 2003/2682, regs 84E–84H

Not only does it apply to employment agencies and intermediaries such as personal service companies or managed service companies but also to any business which uses freelancers to supply services to its clients, even if only to supplement the services supplied by its own workforce.

The reporting obligation is completely detached from the RTI system and requires online submission of a free-standing quarterly report.

There are penalties for late, incomplete or incorrect returns.

Who is affected?

This reporting obligation falls on any employment intermediary which is also an agency, in other words any employment intermediary who has a contract with the third person in respect of the work being done, but only if the intermediary provides more than one worker to the client.

In this context, an employment intermediary has a very wide meaning. It is a person who makes arrangements under which (or as a result of which) an individual works for a third person or receives money for work done for a third person.

ITEPA 2003, s 716B

This means that the reporting requirements could affect a whole range of companies, partnerships and individuals who do not consider themselves to be employment intermediaries or agencies. See Example 1.

The reporting requirement does not apply if

More on Particular types of employee: