https://taxagents.blog.gov.uk/2014/05/01/employment-status-manual-new-guidance-on-employment-intermediaries-added/

Employment Status Manual – new guidance on employment intermediaries added

In the past, employment intermediaries were often used to disguise people’s employment status as self employed - when they were in fact, employees.
In the Finance Bill 2014, the Government introduced legislation to prevent these attempts to avoid paying national insurance and income tax. New rules apply from 6 April 2014 - and must be considered when a worker is engaged through (or by) an employment business or agency.

Proposals to tackle the avoidance were announced in the Autumn Statement 2013. A consultation was held from 10 December 2013 to 4 February 2014; and a Government summary of consultation responses was published on 13 March 2014, with revised proposals.

To provide clarity on how all this would work in practice, HMRC also published draft guidance on ‘supervision, direction and control.’ This guidance has now been incorporated into HMRC’s online employment status manual.

The new guidance explains the changes in legislation relating to agency workers and also some changes to PAYE legislation. It outlines when the new legislation applies to workers - and when it does not, giving practical examples to help agencies decide. It also explains the separate rules for workers who provide their services through a service company.

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