What is ITEPA and do I HAVE to provide the details to my Agency?


ITEPA – What is it? (Income Tax (Earnings and Pensions) Act)

If you are an IT Contractor, then you may have been contacted by your agency with regards to Income Tax Earnings and Pension Act. – Here is the SQ Computer Personnel guide to it all…

Government officials at HMRC believe that some people are paying too little tax or not their “fair-share” and have introduced ITEPA to challenge this theory, also known as Income Tax (Earnings and Pensions) Act. It came into effect in 2003, but amendments in the latter part of last year and then further enforcements in April this year have meant changes effecting “Contractors” in general.

Do I need to provide details if I am outside or IR35?

SQ Computer Personnel and all companies operating as Recruitment Agencies must collect and collate any payments to their contractors or their LTD companies. – Even those under PAYE employment or using Umbrella services. You should have started receiving information from your agency already, but if not don’t be surprised when it does come through over the next few weeks. The request for information may contain requests for sensitive information, (a list is below), but don’t be alarmed – it is a legal requirement.

What does ITEPA mean for me if I am working through an Umbrella company on a PAYE contract?

Your details will still need to submit by your agency to HMRC, however, they WILL NOT need to take details on how much you have been paid and pass that through to them.

What information is required for I.T.E.P.A.?

  • Your full name including any middle names that you have
  • Your full personal postal address
  • Your National Insurance Number
  • Your gender
  • Your date of birth
  • Your UTR (Unique Taxpayer Reference) if you are self-employed or a member of a partnership

Can I send them straight to HMRC?

Unfortunately, the agency will need to provide the report on your details and it won’t be suitable to send on the details directly to HMRC.

What if I don’t want to give them my details?

You can refuse to give your agency the details, however if you do so then the agency will not be able to employ you. Large penalties will be sent to those who don’t conform to the new regulations. SQ Computer Personnel has a clause in our contract that contractors must provide information that the agency needs to remain compliant – this would most likely fall within that definition.

Are my details safe?

Your details are protected by the Data Protection act, so they should be safe. The details must be kept on file for 3 years at least, and be submitted once every 3 months/quarterly.

Do I need to do anything myself at all?

It is unlikely that you will need to supply anything other than the requested information from your agency, although there are special circumstances for those who run Personal Service Companies (PSC) with staff (more than 1). In this instance you may need to provide a report.

Where is the full legislation?

The Full legislation is here: http://www.legislation.gov.uk/uksi/2015/171/pdfs/uksi_20150171_en.pdf

A useful guide from HMRC is here: https://www.gov.uk/government/publications/employment-intermediaries-reporting-requirements

An Accountants View: http://www.broomeaffinity.com/blog/itepa-regulations-and-how-they-affect-contractors/

This link is really helpful too: http://www.apsco.org/guidance.aspx

If you have any questions about it all then please feel free to give me a call to discuss it on 020 8463 0555 or drop me an email at [email protected]