Onshore employment intermediaries—income tax provisions
Produced in partnership with Patrick Ford of Squire Patton Boggs (UK) LLP
Onshore employment intermediaries—income tax provisions

The following Tax guidance note Produced in partnership with Patrick Ford of Squire Patton Boggs (UK) LLP provides comprehensive and up to date legal information covering:

  • Onshore employment intermediaries—income tax provisions
  • Onshore employment intermediaries—pre-FA 2014 position
  • Onshore employment intermediaries 2013 HMRC consultation
  • Onshore employment intermediaries—post-FA 2014 position
  • Effect of agencies legislation applying
  • Anti-avoidance provision
  • Other definitions

This Practice Note explains the income tax provisions that apply to onshore employment intermediaries, including a summary of the position before and after the changes introduced by the Finance Act 2014 (FA 2014).

The onshore employment intermediaries legislation broadly applies when an onshore employment intermediary entity is used to facilitate the provision of a worker's services. The revised legislation is broadly aimed at ensuring genuine employment is not disguised as self-employment in order to reduce employment taxes (in particular, National Insurance contributions (NICs)) and also to reduce the costs associated with workers' employment rights.

For details of the practical considerations of the post-FA 2014 position, see Practice Note: Onshore employment intermediaries—key practical considerations.

For details of the income tax provisions applicable to offshore employment intermediaries, see Practice Note: Offshore employment intermediaries—income tax provisions and key practical considerations.

Note that when considering employment intermediaries structures, certain other rules should also be considered, namely:

  1. the IR35 legislation (for further details, see Practice Note: IR35—the general regime)

  2. the rules for off-payroll working (for further details, see Practice Note: IR35—off-payroll workers)

  3. the managed service company rules (for further details, see Practice Note: Managed service companies and the anti-avoidance legislation), and

  4. the rules requiring deduction of income tax in respect of payments or transfers to (or in connection with) non-resident performers

Onshore employment intermediaries—pre-FA 2014 position

The Income Tax