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HMRC internal manual

Employment Income Manual

PAYE: special type of payer or payee: agency workers: who has to operate PAYE: payment in cash

Part 11 Chapter 3 ITEPA 2003

Individual works for Paid by PAYE must be operated by Legislation (ITEPA 2003)
UK client through UK agency Client Client Section 684
  Agency Agency Section 684
  UK intermediary of client Intermediary of client Section 684
  Overseas intermediary of client Client Sections 688(2) and 687
  UK intermediary of agency Intermediary of agency Section 684
  Overseas intermediary of agency Agency Sections 688(1) and 687
UK client through overseas agency Client Client Section 684
  Agency Client Sections 688(1) and 689
  UK intermediary of client Intermediary of client (see the note below) Section 684
  Overseas intermediary of client Client Sections 688(2) and 687
  UK intermediary of agency Intermediary of agency Section 684
  Overseas intermediary of agency Client Sections 688(1) and 689
Overseas client through UK agency Client No-one  
  Agency Agency Section 684
  UK intermediary of client Intermediary of client Section 684
  Overseas intermediary of client No-one  
  UK intermediary of agency Intermediary of agency Section 684
  Overseas intermediary of agency Agency Sections 688(1) and 687

You should only consider whether the person making a payment of PAYE income is an intermediary if you are satisfied that the agency is not required to operate PAYE. For example, engaging a payroll agent does not remove the PAYE obligation from the agency (see EIM11812).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)