HMRC has specific rules for companies that supply workers to end clients. These are called the Employment Intermediaries (EI) reporting requirements.
In simple terms: if your company supplies more than one individual to a client during a quarter, and you pay them gross (without PAYE), you may need to send HMRC a quarterly report.
The purposes of this guide, when we speak about an Intermediary, what we are referring to is your Ltd Company.
When does EI reporting apply?
You need to consider filing a report if all of the following apply in a quarter:
- You hold the contract with the end client.
- More than one individual provided services to the client under that contract in the quarter (this can include subcontractors, substitutes, or extra labour).
If these apply, a quarterly report may need to be filed with HMRC. Read on for exclusions of who you don’t file for.
Deadlines:
- 6 April–5 July → 5 August
- 6 July–5 October → 5 November
- 6 October–5 January → 5 February
- 6 January–5 April → 5 May
Penalties: £250 / £500 / £1,000 for late filings (1st, 2nd, and 3rd+ offence in a 12-month period).
Who do I need to file for?
Even you if meet the criteria above, usually you do not need to file for anyone (in which case no filing is required). See the exclusions below for who you do not have to file for:
- Home-only or non-client premises – If a worker does all of their work from home or premises not controlled by the client (for example, their own office or a co-working space), they don’t need to be reported.
- Non-UK resident working wholly outside the UK – If the person is based abroad and never works in the UK, they don’t need to be reported.
- They are paid PAYE – It does not matter the size of wages / salary. If the worker is on the payroll of the intermediary, there is no need to report them.
- Introductions only – If your company only introduces a worker to a client, and is not responsible for paying or supplying them, you don’t need to file.
⚠️ Important: If the nature of the work requires a worker to be at the client’s site (or a site the client controls), the “home-only” exclusion does not apply – those individuals are reportable.
Examples
- You engage a Freelancer via Fiverr /Upwork abroad to help with some client work → Not reportable.
- UK freelancer working from their own home → Not reportable.
- Short on-site sub-contractor (4 weeks at client office) → Reportable if you also performed client work in the same quarter, as this sub-contractor would be the “second” person supplying services.
- Short on-site sub-contractor (4 weeks at client office) while you spend the quarter on holiday → Not reportable as there is only one worker supplying services for that quarter.
- One-person company who works on client premises → Not reportable, there must be more than one worker supply services through the intermediary).
- You and a subcontractor both work on client premises in the same quarter → Reportable, as this counts as more than one worker. Only report the sub-contractor if you are on the company payroll.
- You and a subcontractor both work for the same client. You work on the client premises, and the sub-contractor works from home → Not reportable, as you are on the company payroll, and the sub-contractor works from home. If a director/shareholder works on client contracts but does not draw a PAYE salary, and there is also another subcontractor working from home, the director may themselves become reportable – a rare but possible situation.
- Your company has two directors and both work on client sites. Not reportable assuming both are on the company payroll (the size of the salary is irrelevant).
What information needs to be reported?
For each reportable worker, you must provide:
- Full name and address
- NI number, or date of birth and gender if NI is not available
- Engagement start and end dates
- Reason PAYE was not operated (HMRC has six categories)
- Payment details (amount paid, VAT flag, who was paid, company number if a company)
You must keep supporting records for 3 years. HMRC requires the official reporting template to be used.
Key takeaway
Most of our limited company clients never need to file an EI return, because they either:
- work alone;
- only use people who work from home/remotely; or
- only ever supply one person to work on clients contracts a quarter at a time.
But if you do use more than one person in a quarter to deliver client work and they’re not on your PAYE, you may need to file.
If you’re unsure, speak to us and we can help you review your situation.