CISR13050 - The Scheme: subcontractors: labour agencies
Where a worker is supplied to a contractor by or through an agency and the worker carries out construction operations under the terms of a contract they have with the agency, the agency supplying the worker will be a subcontractor. The contractor should apply the Scheme when making payment to the agency. The agency is just like any other private business and should register as a subcontractor to enable it to receive payments under the Scheme either gross or after the standard rate of deduction has been applied.
Off-payroll working
Where the off-payroll working rules apply, the scheme should not be operated on the payments to the agency from the contractor. The off-payroll working rules take priority over the CIS (FA04/s60(3A)).
For further information about off-payroll working rules read the Employment Status Manual at ESM10004A
However where a worker is merely introduced to the contractor by an agency and carries out construction operations under the terms of a contract they have with the contractor, the Scheme does not apply to the agency as there is no construction contract between the contractor and the agency.
See also CISR14070 where a UK concern is providing labour for an overseas project.