Currently agencies are required, on a quarterly basis, to provide details to HM Revenue & Customs about themselves and any workers they have been involved in the supply of to end-clients, where the workers have been treated as self- employed for income tax and NI purposes and paid outside of PAYE.

According to HMRC’s revised reporting requirements, agencies (as ‘intermediaries’) will, in the same quarterly record on workers they provide to the end-user, also report the details of those who operate via an external PAYE umbrella company. The net payments to workers won’t have to be disclosed to HMRC by the agency (as that information is provided by the umbrella company via their RTI submissions) but the agency will have to report the amount paid gross to the umbrella company, including expenses and VAT. This means that HMRC will have access to both gross and net payments which will enable them to determine whether or not PAYE has been correctly applied; it will also provide a comprehensive record of which recruitment agencies are working with which umbrella companies.