“If more than one option applies to a worker, select the one that best describes why PAYE wasn’t operated for the engagement.”
It’s official: Umbrella workers are category F
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We’re pleased to note that HMRC recently updated its Intermediaries’ Reporting Requirements guidance and has now clarified that recruiters should report their Umbrella workers under category F.
Their published guidance originally stated that if more than one reason code applied, you should pick the first applicable reason on their list – category D.
However, this has been revised to:
This allows recruiters the freedom to choose category F – ‘another party operated PAYE on the worker’s payments’, which seems to us to best describe an Umbrella engagement. In case there was any remaining doubt, the guidance also goes on to state:
“workers paid through an umbrella company are option ‘F’.“
We always believed category F was the most appropriate for Umbrella workers and are happy that any misunderstanding has now been cleared up.
On a related note, some recruiters have asked us if they have to report payment details for Umbrella workers. Our understanding has always been that these were not needed and HMRC’s new guidance supports this interpretation:
“You don’t have to include payment details where they have already been included as part of a PAYE Real Time Information (RTI) submission by any other organisation”
We’ve updated our Intermediaries’ Reporting guidance for recruiters with Umbrella workers in line with all the latest changes and as always, are here to support.