PAYE: special type of payer or payee: agency workers: example
Sections 688 ITEPA 2003
An individual works for a UK client. The individual is hired to work for the client via a UK agency. The worker is paid by an offshore intermediary of the client. Payment is made in readily convertible assets.
Is PAYE due on the payment by the overseas intermediary?
The overseas intermediary making the payment is outside the PAYE regulations but the remuneration arises under an agency agreement (see the Employment Status Manual, ESM2000).
A payment of readily convertible assets in these circumstances is treated as a payment by the UK agency (under sections 688(1) and 696 ITEPA 2003) for the purposes of Part 11 ITEPA 2003. So the agency is required to operate PAYE.