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HMRC internal manual

Employment Status Manual

Agency and temporary workers: agency legislation - provisions from 6 April 2014: professional workers

The fact that a person is practicing a profession or trade with income chargeable as trading income and with liability to income tax and Class 2/4 NICs as a self-employed earner, does not automatically mean the agency legislation does not apply to arrangements entered into by that person. It is necessary to consider the full circumstances and arrangements of each engagement when determining whether the provisions of the agency legislation apply, see ESM2034.

Many workers provide their services as a skilled professional (such as a structural engineer) in circumstances when they are subject to (or to the right of) supervision, direction, or control and would otherwise be employees of the client if not for the special contractual arrangements involving agencies. The fact that they are professionally qualified, skilled, or experienced may mean that supervision, direction, or control is not always exercised in practice but there may still be the right to do so as and when the need arises, see ESM2037.

For income tax purposes, the administrative practice at EIM3002 may occasionally apply for professional persons who undertake agency work that is merely incidental to work they carry on through their private practice. However, it will not apply if a significant part of their work consists of engagements to which the agency legislation applies. There is no equivalent administrative practice for NICs purposes so when the agency legislation applies; the agency and the worker will be liable to pay Class 1 NICs even though income tax will not be collected via PAYE.

From 6 April 2014 onwards, a professional worker who enters into an agency arrangement but is not subject to (or to the right of) supervision, direction, or control over the manner in which they provide their services, see ESM2037, will not fall within the provisions of the agency legislation. However, from 6 April 2014, agencies must be able to show this is the case if they are providing workers direct to a client on a self-employed basis, (see ESM2042).

When a worker is providing their services through a service company (including a PSC), see ESM2051.

For partners, unincorporated bodies and their members, see ESM2050.