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HMRC internal manual

Employment Status Manual

Particular issues: multiple intermediaries

Paragraphs 14,15 and 16 Schedule 12 Finance Act 2000/Section 59 ITEPA 2003

Regulations 9, 10 and 11 SI 2000 No. 727


In most cases there will only be one intermediary. However, you may come across cases where more than one intermediary is involved in a relevant engagement. In such cases a deemed payment may arise for each intermediary. However, any necessary adjustment should be made to avoid any double counting of the income from the relevant engagement.

Where multiple intermediaries are involved, which meet the conditions in ESM8040 onwards, then the legislation provides for each of them to have joint and several liability for the tax and NICs due. However, this only applies where the intermediary has received any payment or benefit from the relevant engagement.

Where one intermediary will not or cannot pay any liability, then payment should be sought from any other intermediaries. This may be necessary where, for example, the first intermediary is resident overseas. In such cases no practical action can be taken to collect from it the additional tax and Class 1 NICs.

In the event that the additional amounts cannot be collected from any of the intermediaries, then consider;

  • for unpaid tax - collecting the amount due from the worker under Regulation 72 of the Income Tax (PAYE) Regulations 2003 SI 2003 No. 2682
  • for unpaid NICs - collecting any employee’s NICs due from the worker under Regulation 86 of the Social Security (Contributions) Regulations 2001 SI2001 No. 1004. But you cannot collect any unpaid secondary NICs in this way.

An unconnected third party, such as an agency, is not considered to be an intermediary for the purposes of the legislation