Onshore employment intermediaries—key practical considerations
Produced in partnership with Patrick Ford of Squire Patton Boggs

The following Tax practice note produced in partnership with Patrick Ford of Squire Patton Boggs provides comprehensive and up to date legal information covering:

  • Onshore employment intermediaries—key practical considerations
  • Onshore employment intermediaries
  • Personal services
  • 'Supervision, direction or control'
  • Approach by intermediaries
  • Documentation
  • More than one agency
  • Identity of intermediary—agent or principal
  • Interaction with IR35
  • PAYE and reporting issues
  • More...

Onshore employment intermediaries—key practical considerations

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 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 a detailed explanation of the legislation, both before and after the Finance Act 2014 (FA 2014), see Practice Note: Onshore employment intermediaries—income tax provisions.

This Practice Note deals with practical considerations of the post-FA 2014 position.

Onshore employment intermediaries

The consultation process that preceded the 2014 introduction of the onshore intermediaries legislation highlighted numerous concerns as to the definitions and use of 'supervision, direction or control' in the amended legislation. As a result of those consultation responses, HMRC slightly altered the legislation when in draft form and has also issued pieces of guidance as to the key phrase 'supervision, direction or control'.

To recap, in order for the onshore intermediary legislation to apply:

  1. the worker must personally provide services (which are not excluded services) to the client, and

  2. there must be a contract between the client and any person who is not the worker, the client or a person connected with the client (the agency), and under or in consequence of that contract:

    1. the

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