Reply to: Agency's due diligence checks

[James10]

So in the article that Andy linked, this part of HMRC's "guidance" was quoted:

Where a PSC has only one individual providing services to an end client the PSC will not be a specified intermediary and will therefore have no filing responsibilities. A PSC however will appear on a different intermediary’s return where their services have been provided by that intermediary to an end client. If the PSC subcontracts to another PSC or where more than one worker of the PSC provides services to an end client they will be caught by the legislation as a specified employment intermediary and would need to file a return

For me, this raises another question: What, for example, is the situation with a two-person PSC (e.g. husband and wife) where each individual is providing services to a different end client?

Does this mean that the PSC is caught because there are two or more individuals providing services to clients in general, or the PSC is exempt because there are not two individuals providing services to the same client?

Clear as mud to me...

[Zero Liability]

I haven't seen all of the questions, but this one does seem a bit intrusive:

"Did you take accountancy advice before you commenced contracting via your contracting entity?
If yes, please provide the name and contact details of your advisor below..."


If you feel a question is unnecessary, write back to the agency and ask why they need that particular piece of information. Their pre-amble explains they have a policy to ensure compliance, and "may" stop paying if you don't answer all the questions right, but that might just be bluster - designed to make sure they get a good response to the questionaire. They don't actually say they *won't* have your business.

Personally I would also remind the agency that I have never described my limited company as a PSC, and I would ask them to avoid the term in future. [this is your own bit of bluster!]

And see what they say.

Considering what these reports are actually asking for, these questions seem like overkill. I thought a lot of agency contracts already make it crystal clear that your tax affairs are your and not their (or their client's) problem. So why the need for the overkill?

As for IR35, I imagine this flood of information may help HMRC target their campaigns a bit more precisely but given the cost and complexity of IR35 cases and their resource constraints, I can't see it changing very much else. I think the big game changer they're waiting on is the still mysterious FLC, i.e. the crystallisation of their invention, the PSC.

[BolshieBastard]

Just applied for a role with an agency whose name rhymes with ways, in return they sent me a link to complete their due diligence checks and contractor background info. Never seen such a bunch of bs in my life, its clearly aimed at temps but they've expanded it to contractors.

I know they have to go through more checks but one of the questions was 'do you have own transport?' Answer 'Yes' subsequent question 'What is your form of transport?'

I was tempted to put horseback but decided against completing the rest of the questions instead!

[LisaContractorUmbrella]

What are your thoughts on the contractor calculator article's argument I linked? It was discussed in a thread on here where TCP was able to get further clarification and it does sound interesting.

Link for reference:

http://forums.contractoruk.com/accou...ew-months.html

It's not an accurate report unfortunately - the new Agencies Legislation in the ITEPA will not apply to PSC's and this has been confirmed by HMRC https://www.gov.uk/government/upload...ITEPA_2003.pdf - it's only the reporting that will be required so I don't think there will be any impact on IR35

[Zero Liability]

As Andy said ALL agencies will be doing this from now on as HMRC require information from them - they will have to report on anyone that works through them for an end client who is not on their payroll. This template https://www.gov.uk/government/public...eport-template which HMRC put out in an RSS feed yesterday shows what information is required

What are your thoughts on the contractor calculator article's argument I linked? It was discussed in a thread on here where TCP was able to get further clarification and it does sound interesting.

Link for reference:

http://forums.contractoruk.com/accou...ew-months.html

[FatLazyContractor]

As Andy said ALL agencies will be doing this from now on as HMRC require information from them - they will have to report on anyone that works through them for an end client who is not on their payroll. This template https://www.gov.uk/government/public...eport-template which HMRC put out in an RSS feed yesterday shows what information is required

While the reporting template looks "reasonable", where would the agencies report information like Shares, accountant details etc to HMRC?

Or am I missing something fundamental?

[LisaContractorUmbrella]

As Andy said ALL agencies will be doing this from now on as HMRC require information from them - they will have to report on anyone that works through them for an end client who is not on their payroll. This template https://www.gov.uk/government/public...eport-template which HMRC put out in an RSS feed yesterday shows what information is required

[Zero Liability]

Wouldn't it save the agency a great deal of expense and trouble to just get the client on board re SDC, e.g. via a CoA, as per the below?

IR35 could become irrelevant within months, with new rules taking effect from April

One would think if this is the case, that contractor bodies would be doing more with agencies and their bodies to get the point across.

[unixman]

I haven't seen all of the questions, but this one does seem a bit intrusive:

"Did you take accountancy advice before you commenced contracting via your contracting entity?
If yes, please provide the name and contact details of your advisor below..."


If you feel a question is unnecessary, write back to the agency and ask why they need that particular piece of information. Their pre-amble explains they have a policy to ensure compliance, and "may" stop paying if you don't answer all the questions right, but that might just be bluster - designed to make sure they get a good response to the questionaire. They don't actually say they *won't* have your business.

Personally I would also remind the agency that I have never described my limited company as a PSC, and I would ask them to avoid the term in future. [this is your own bit of bluster!]

And see what they say.

[Andy Hallett]

Sorry to break it to everyone but this is going to be the norm. Sometime between now and the first deadline for RTI in the new tax year you will be asked for this information.

The HMRC are making everyone in the chain report and the common identifier to make sure everyone is being good tax payers will be your NI number etc.

We'll be rolling out our policy in the next few weeks which will be an admin nightmare.

Lisa has written an article on it for a better explanation.

Onshore intermediary reporting rules turn us into HMRC's informants or targets :: Contractor UK

[BHicks]

Hi, newbie here, contracting for the first time via an Agency and working on-site with a Client.

I've been required lots of information, proof of identity, address, proof of qualifications, criminal records, etc. from both, the client AND the agency.
This process will take (they said) around 2 weeks so I don't have yet the starting date but funny enough I have the end date of the contract (they say after that there are renewals.)

Is this common?

Yes it's normal. Yes it's a pain, but that's part of the wonderful world of contracting.

I've just been through a similar process for a new gig through Aston Carter/TEKSystems/Allegis, about the only thing they didn't want was a DNA sample and an inside leg measurement.

[AnotherGuy]

Hi, newbie here, contracting for the first time via an Agency and working on-site with a Client.

I've been required lots of information, proof of identity, address, proof of qualifications, criminal records, etc. from both, the client AND the agency.
This process will take (they said) around 2 weeks so I don't have yet the starting date but funny enough I have the end date of the contract (they say after that there are renewals.)

Is this common?

[FatLazyContractor]

How does the agency knowing my NI number and passport number show that I am operating via a bona fide company?

Why do they need to know

to check whether I operate via a genuine company?

Why do they need to know who all the shareholders are?

Why do they need to know who the people that are authorised to access the bank account are?

As well as not being happy with the questions that are being asked, I would also want to know details of their data retention and security policy, and a statement explaining how they will transmit the data to HMRC to ensure that there is no chance of a data breach.

Made it clear to them in writing that I will only "think about" sending the requested data if they reply with copies of their data security and data retention policies.

As for the rest, do I see a sword on our necks?

[TheFaQQer]

Seems pretty reasonable. The questions just seem to ask if you are a bona fide company, which most of us are. Did I overlook something ?

How does the agency knowing my NI number and passport number show that I am operating via a bona fide company?

Why do they need to know

Did you take accountancy advice before you commenced contracting via your contracting entity?
If yes, please provide the name and contact details of your advisor below:

to check whether I operate via a genuine company?

Why do they need to know who all the shareholders are?

Why do they need to know who the people that are authorised to access the bank account are?

As well as not being happy with the questions that are being asked, I would also want to know details of their data retention and security policy, and a statement explaining how they will transmit the data to HMRC to ensure that there is no chance of a data breach.

[TykeMerc]

Seems pretty reasonable. The questions just seem to ask if you are a bona fide company, which most of us are. Did I overlook something ?

Only that there's no definition in law of what a PSC actually is so it makes those questions totally meaningless