Income Tax (Earnings and Pensions) Act 2003 section 691

Mobile UK workforce

Section 691 deals with situations where a contractor supplies its employees to work for another person, but PAYE is unlikely to be properly operated, allowing HMRC to direct that other person to deduct and account for income tax instead.

• Where a contractor's employees work for another party (the "relevant person") but are not directly employed by them, and PAYE is unlikely to be properly deducted or accounted for, HMRC may intervene
• HMRC can issue a direction requiring the relevant person to deduct income tax and any relevant debts from payments made in respect of the work, whether those payments go to the contractor or elsewhere
• The direction must name both the relevant person and the contractor, must be given by notice to the relevant person, and can be withdrawn at any time by further notice
• When a direction is in force, the relevant person must treat the portion of each payment attributable to an individual employee's work as if it were a payment of PAYE income to that employee, and apply PAYE deductions accordingly