Finance Act 1998

69Intermediaries, non-UK employers, agencies etc

(1)In section 203C of the Taxes Act 1988 (application of PAYE to payments to employees of a non-UK employer working for another where payment made without deduction by the employer or his intermediary), in subsection (1)(b), (c) and (d), after “of the employer” there shall be inserted “or of the relevant person”.

(2)In that section, the following subsections shall be inserted after subsection (3)—

“(3A)Where, by virtue of any of sections 203F to 203I, an employer would be treated for the purposes of PAYE regulations (if they applied to him) as making a payment of any amount to an employee, this section shall have effect—

(a)as if the employer were also to be treated for the purposes of this section as making an actual payment of that amount; and

(b)as if paragraph (a) of subsection (3) above were omitted.

(3B)References in this section to the making of any payment by an intermediary of the relevant person shall be construed in accordance with subsection (4) of section 203B as if references in that subsection to the employer were references to the relevant person.”

(3)For subsections (1) and (2) of section 203L of that Act (interpretation) there shall be substituted the following subsections—

“(1)Subject to subsections (1A) and (1B) below and section 203J(2)(b), in sections 203B to 203J—

• “employee” means a person who holds or has held any office or employment under or with another person; and

• “employer”—

  (a)

  in relation to an employee, means a person under or with whom that employee holds or has held an office or employment; and

  (b)

  in relation to any assessable income of an employee, means the person who is the employer of that employee in relation to the office or employment in respect of which that income is or was provided or, as the case may be, by reference to which it falls to be regarded as assessable.

(1A)Subject to subsection (1B) below, where the remuneration receivable by an individual under or in consequence of any contract falls to be treated under section 134 (agency workers) as the emoluments of an office or employment, sections 203B to 203K (except section 203E) shall have effect as if that person held that office or employment under or with the agency.

(1B)Where—

(a)the remuneration receivable by an individual under or in consequence of any contract falls to be so treated under section 134, and

(b)a payment of, or on account of, assessable income of that individual is made by a person acting on behalf of the client and at the expense of the client or a person connected with the client,

section 203B and, in relation to any payment treated as made by the client under section 203B, section 203J shall have effect in relation to that payment as if the client and not the agency were the employer for the purposes of sections 203B to 203K.

(1C)In subsections (1A) and (1B) above “the agency” and “the client” have the same meanings as in section 134; and section 839 applies for the purposes of those subsections.

(2)In sections 203B to 203K and in this section “assessable” means assessable to income tax under Schedule E.”

(4)In section 144A(2) of that Act (payments etc. received free of tax), after “employer” there shall be inserted “, in relation to any provision of sections 203B to 203J, is a reference to the person taken to be the employer for the purposes of that provision and”.

(5)The preceding provisions of this section have effect in relation to payments made, assets provided and vouchers received at any time on or after 6th April 1998 and in relation to any use of a credit-token on or after that date.

(6)Nothing in this section shall be taken to have changed—

(a)the amounts which were deductible by any person under section 203 of the Taxes Act 1988 at any time on or before the day on which this Act is passed; or

(b)the amounts which should have been accounted for to the Board under section 203J(3) of that Act at any time on or before the fifth of the month following that in which this Act is passed;

but, the amounts which (but for this subsection) would have been deductible, or would have been amounts for which any person should have accounted, shall be deducted or accounted for in accordance with any such provision as may be made by regulations under section 203 of the Taxes Act 1988.