Any charity which provides the services of workers (who are not on the payroll) to another organisation under a “labour only” contract will need to consider if they have a quarterly reporting obligation under the intermediaries legislation, introduced in April 2015. Failure to submit a return may result in a penalty.

This reporting requirement is separate from the agency rules, under which the charity needs to consider whether they need to operate PAYE.

The intermediaries legislation might apply where the charity supplies a self-employed worker (e.g. a care worker) to another organisation.

HMRC has published guidance on reporting requirements. It is also worth considering the rules on travel and subsistence payments to workers supplied by another organisation.