(1)In section 134 of the Taxes Act 1988, subsection (5)(c) (which excepts from charge by virtue of that section the remuneration of construction workers who are sub-contractors supplied by agencies) shall cease to have effect.
(2)In section 559 of the Taxes Act 1988 (deductions on account of tax etc. from payments to certain sub-contractors), in subsection (1), for “subsection (2) below” there shall be substituted “the following provisions of this section”; and after subsection (1) there shall be inserted the following subsection—
“(1A)Subsection (1) above shall not apply to any payment made under the contract in question that is chargeable to income tax under Schedule E by virtue of section 134(1).”
(3)Subsections (1) and (2) above have effect in relation to—
(a)any payments made on or after 6th April 1998 other than any made in respect of services rendered before that date; and
(b)any payments made before 6th April 1998 in respect of services to be rendered on or after that date.