Income Tax (Earnings and Pensions) Act 2003 section 45

Arrangements with agencies

Section 45 deals with how remuneration received by an agency worker under arrangements with an agency is treated for income tax purposes, even when the worker is not currently assigned to a particular client.

• Where a worker enters into arrangements with a third party (an agency) with a view to personally providing services to a client, and those services are not excluded services, the agency worker rules may apply.
• If the arrangements are such that any services provided would be treated under section 44 as duties of an employment held by the worker, then the tax treatment of associated remuneration follows accordingly.
• Any remuneration the worker receives under or as a consequence of those arrangements is treated as earnings from that deemed employment for income tax purposes.
• This covers payments made by the agency while the worker is on their books, including periods when the worker has not been assigned to any particular client.