Section 18: Employment Intermediaries: Determination of Penalties
Summary
1.This section amends existing legislation for the procedure for recovery of penalties under Section 100 Taxes Management Act (TMA) 1970. This allows HMRC to issue penalties without issuing proceedings before the First-Tier Tribunal where the penalty relates to the late filing of, non-submission of, or incorrect or incomplete, quarterly returns from employment intermediaries from 6 April 2015.
Details of the Section
2.Subsection (1) provides that Section 100 TMA 1970 (determination of penalties by officer of Board) is amended.
3.Subsection (2) inserts new “subject to subsection (2A)” after “those amendments” in sub- section (2) (c). Subsection (3) inserts new subsection (2A) after subsection (2). New subsection (2A) provides that penalties in relation to an intermediaries return do not appear in the list of exceptions to section 100 TMA 1970 contained in section 100(2) TMA 1970. This means that penalties in relation to the failure to keep, preserve and provide information in the employment intermediaries return required under s716B of the Income Tax (Earnings and Pensions Act) 2003 (“ITEPA”) can be issued by an Officer of the Board and do not require proceedings before the First Tier-Tribunal.
4.The amendments made by this section come into force on 6 April 2015.
Background Note
5.Legislation was introduced in Finance Act 2014 to prevent the avoidance of employment taxes by UK agencies engaging UK workers via non-UK agencies, prevent intermediaries facilitating false self-employment and provide for the introduction of the Employment Intermediaries Information Quarterly Return (the first return is due to be submitted by 5 August 2015). This section supports the government’s anti-avoidance policy by tackling those who have carelessly or deliberately failed to comply with the returns requirements in regulations made under s716B of ITEPA 2003. These regulations will allow HMRC to take an appropriate targeted compliance response where required.
