Financial Intermediaries Regulations

BITE Consulting are not an agency or competitor and offer free support to help keep both the contractor and agency compliant particularly as we move past April 2017 and into 2018.

Compliance is now critically important to both IT and Interim Contractors and the agencies that place them into contracts and the need for all intermediaries to report against it.BITE Consulting helps agencies by producing a report on any contractor in the format required by HMRC for agencies and by administering the compliance of Contractors PSC’s through it’s compliance portal.See BITE Consulting’s SUPPORT SUMMARY for agencies at the bottom of this page.

The Financial Intermediaries Regulations were introduced in April 2014 however in April 2015 the Financial reporting requirements became effective. As a result HMRC with the Intermediary reporting requirements April 2015 have laid out a detailed report that must be completed by all “specified” intermediaries the entity between the worker and the end client each quarter.

HMRC are expecting agencies and Intermediaries to report on all Limited company contractors they engage providing them with personal information such as their N.I. Number and I.D. details plus how much they have been paid for however many hours they have worked where. They already require a full report on all PAYE temporary workers via an RTI report each month. This will mean that every contractor will be reported on more than once and gone will be the days when it has taken 2 years for HMRC to know they exist!

HMRC are also expecting all “Specified Intermediaries” to deduct PAYE at source unless they can prove that contractors are a true freelance contractor defined as not being subject to “Direction, control or supervision” or the need for it plus many other factors or tests under IR35. Therefore that a contractor is operating outside of IR35. In addition to the Direction and control issue HMRC will want evidence they are running a genuine business and are not just a disguised employee.An important part of this is insuring their business and providing a full set of company records .

The definition of an Intermediary covers both agencies and the contractors limited company (PSC) or anybody used to contract the worker or consultant through.

Agencies will be liable if they do not check Limited company compliancy and report on it and any work the company gains through them. They will  want  to check that the worker is a director and shareholder of his company and if not that he is being subjected to  full PAYE.

Equally through the use of an RTI all PAYE workers will need to be seen to be compliant via the return of an RTI to HMRC covering their earning tax and insurance plus personal details and any subject to client Direction , supervision or control will not be permitted to claim travel and subsistence expenses.

WHAT DOES THIS MEAN?- That agencies should not deal with contractors who do not operate in a compliant manner. They simply should not be given a contract if they can’t demonstrate that they operate in a compliant manner manner. Also that contractors will only net more income through a limited company than permanent employment if they can prove they are not being subjected to any Direction Control or Supervision or the need and are operating outside IR35.

SO HOW DO CONTRACTORS DO THIS?- By firstly  signing a contract with the right terms in with no control lead wording, secondly confirming their actual working conditions as not having any direction control or supervision and thirdly by maintaining a proper record of their business through a professional business log. At BITE Consulting we help facilitate this all through a compliancy portal which handles the compliancy administration for CONTRACTORS and provides save storage of their records.

 

It makes sense for everyone to operate in a compliant manner in the UK so don’t get caught out and everyone should take steps to provide a proper audit trail that demonstrates they are a professional running a professional business.

BITE’s Interim Reporting support for agencies

SUPPORT SUMMARY

We will provide each agency a report in HMRC standard format for any contractor engaged on a contract through BITE.

We will provide a contract compliance portal and audit and check every PSC Contractor helping to ensure compliance for agencies

We will assist in the verification of the Direction Supervision and control and IR35 issue by assessing actual working conditions for contractors

If agencies the closest intermediary to PSC’s are made responsible for Public sector PAYE  deductions BITE Consulting can take this burden as an intermediary transfering the responsibility and using it’s compliance portal to manage the IR35 CONTRACT PAYMENT PROCESS