What is an offshore intermediary?

Simply put, offshore intermediaries (outside the EU) have been known to aid tax avoidance by allowing workers in the UK to underpay tax and National Insurance Contributions. The government introduced legislation in the Finance Act 2014 to target tax and NIC avoiding contractors working with or engaging with offshore intermediaries. Now, UK agencies are responsible for the PAYE and NIC of temporary workers (contractors) when the agency has correspondence with the worker’s hirer (the end-client). Agencies must give HMRC a list every quarter of the contractors they are not deducting tax and NIC for.

Contractors and freelancers must avoid engaging with offshore intermediaries because they risk not paying the legal amount of tax and NIC – putting them at risk of an HMRC investigation.

Churchill Knight is an accredited member of the FCSA (Freelancer and Contractor Services Association) and a SafeRec Certified Umbrella Company. We take pride in providing our employees with a compliant and transparent payroll service. Please contact us using the form on this page to request a tailored, take-home pay calculation, or call our friendly sales professionals today on 01707 871622.