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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Agency and temporary workers: overseas agencies

Where an overseas agency supplies workers within the agency legislation to clients in the United Kingdom, PAYE in respect of those workers should be operated by any branch or permanent representative of the overseas agency in the United Kingdom.

Where the overseas agency has no such branch or representative then the client should be regarded as the relevant person under Section 689 ITEPA 2003, provided the worker is:

  • within the scope of Part 2 Chapter 7 ITEPA 2003, and
  • subject to the general control and management of the client.

The client is, therefore, responsible for the operation of PAYE. The procedure to be applied is set out in paragraph 122 of the Employer’s further guide to PAYE. This procedure should be adopted generally where Section 203C ICTA 1988/Section 689 ITEPA 2003 applies. It is not restricted to employees from abroad.

Similarly for NICs purposes, if the agency does not fulfil the conditions as to residence or presence in Great Britain, the client is treated as the liable secondary contributor by virtue of paragraph 2(c) of column B of Schedule 3 to the Categorisation Regulations. If the worker is covered by European Community regulations or a reciprocal agreement and has a certificate stating that they do not have to pay UK NICs and there is any doubt about liability, send the case for advice, via the Status Inspector, to the SEC Technical team.

See also:

  • ESM2039, ESM2040, ESM2053 and ESM2054 for further guidance on overseas agencies, UK agencies and foreign employers, which is applicable from 6 April 2014 onwards.