HMRC internal manual

Employment Status Manual

ESM2055 - Agency and temporary workers: agency legislation - provisions from 6 April 2014: agency legislation - an explanation of “supervision, direction or control as to the manner in which the services are provided” - for the purposes of the agency legis

Part 2, Chapter 7 Income Tax (Earnings and Pensions) Act 2003, Part 2, Chapter 7, section 44(2)(a)

Social Security (Categorisation of Earners) Regulations 1978, Schedule 1, Part 1, paragraph 2

The conditions that must be satisfied in order for the “agency legislation” to apply have changed from 6 April 2014. See ESM2030 onwards for further details.

One of the conditions of the agency legislation is that the worker must be subject to (or to a right of) supervision, direction, or control as to the manner in which they provide their services (see ESM2037). Anyone can hold that right of supervision, direction or control over the worker; it is not limited to the client for whom the worker is providing their services. This particular condition applied to the agency legislation prior to 6 April 2014 and continues to apply from 6 April 2014 onwards - see ESM2005 and ESM0526.

When determining if this condition applies to a worker’s arrangement, it is necessary to establish if the worker has the freedom to choose how they provide their services, or instead does someone have the power or authority over the worker to dictate how this is done.

For the purposes of the agency legislation, HMRC consider supervision, direction, and control can be defined as follows:

Supervision is someone overseeing a person doing work, to ensure that person is doing the work they are required to do and it is being done correctly to the required standard. Supervision can also involve helping the person where appropriate in order to develop their skills and knowledge.

Direction is someone making a person do is/her work in a certain way by providing them with instructions, guidance, or advice as to how the work must be done. Someone providing direction will often co-ordinate the how the work is done, as it is being undertaken.

Control is someone dictating what work a person does and how they go about doing that work. Control also includes someone having the power to move the person from one job to another.

Contained at ESM2056 to ESM2068 are fictional examples intended to explain when:

(i) the worker has been subjected to supervision, direction or control

(ii) the worker has not been subjected to supervision, direction or control, but there was a right to subject the worker to supervision, direction, or control

(iii) the worker has not been subject to supervision, direction, or control and there was no right to subject the worker to supervision, direction, or control.

In all of the examples, the individual (the worker) does not enter into a contract with any of the end clients to whom they are providing the services. Nor does the worker provide their services to the client via a personal service company, a managed service company, or an umbrella company.


*For additional interim guidance see