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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Agency and temporary workers: individuals

The agency legislation applies to contracts between third parties and individuals. It does not apply to contracts between third parties and companies. Where the contract the agency has is with a company, then the legislation will not operate to treat services rendered under that contract as being the duties of an office or employment.

However, the individual carrying out the work is likely to be an employed earner liable to pay Class 1 NICs, and chargeable to tax on employment income, in respect of the remuneration from the company - as a director and/or employee of the company. If not, it is possible that the legislation will apply to the contract between worker and company. See ESM2017 in this connection.

From 6 April 2014 onwards, an agency contract (that is, a contract between an individual and a third party) is no longer a qualifying condition that must be satisfied before the provisions of the agency legislation can be applied.

See ESM2034 for the qualifying conditions which apply from 6 April 2014 onwards.