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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: working rule agreements (WRA): WRA not operated

Where gross payments are made to employees and a WRA has not been operated do not automatically treat the payments as liable to deduction of tax and NICs in full.

Where the payments

  • are not covered by a dispensation or
  • do not satisfy Section 336,337,or 338 ITEPA 2003 or paragraph 3 of part Vlll of Schedule 3 to the Social Security (Contributions) Regulations 2001

you should consider

  • the nature of the employers trade and
  • the work carried out by the employees concerned to decide whether a particular WRA would be suitable.

WRA not suitable

You should

  • follow the guidance at EIM20000 in deciding whether the payments are liable to tax and NIC.


WRA suitable

You should

  • inform the employer that whilst in strictness the payments are wholly liable to tax and NICs there is a WRA which appears suitable to the type of business and work performed by the employees
  • explain about WRAs and the special tax and NIC arrangements
  • advise the employer that the relevant WRA will be used to determine any liability.

For the future you should advise the employer

  • that the appropriate employer’s association notifies its members of terms, conditions, rates and taxation provisions together with any changes and that they may wish to consider membership or
  • as an alternative to membership they can consult the CIT annually for details
  • to tax and NIC the payments made in full, or
  • to change the basis on which the allowances are paid to make sure full compliance with the S336,S337,S338 ITEPA 2003 travel rules.

You should make it clear that if it is found at a subsequent review that none of the options have been taken HM Revenue & Customs will seek recovery on the total amounts paid after the date of such advice.

When the intervention is finalised the caseworker or AO should notify the PAYE Section by memo of

  • the action taken in determining the tax and NIC position of payments made by the employer and
  • the options given to the employer in respect of any future payments made.