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Written question asked by Jim Shannon (Democratic Unionist Party) on Tuesday, 7 June 2022, in the House of Commons. It was due for an answer on Wednesday, 15 June 2022. It was answered by Lucy Frazer (Conservative) on Wednesday, 15 June 2022 on behalf of the Treasury.

Employment Agencies: Income Tax

Question

To ask the Chancellor of the Exchequer, what assessment he has made of the obligations of employment agencies and umbrella companies under schedule 44, section 2 of The Income Tax (Earnings and Pensions) Act 2003.

Answer

Most agency workers must be treated as employees for Income Tax and National Insurance contributions (NICs) purposes by the agencies that pay them. These agencies are required to make deductions of Income Tax and employee NICs, where these are due, from the workers’ pay in the same way and at the same level as with direct employees. The agencies will also be liable to pay employer NICs, where these are due, in respect of payments to the workers.

The rules for agencies do not apply to umbrella companies, which engage workers under a contract of employment. Like all employers, umbrella companies are responsible for making deductions of Income Tax and employee NICs from their employees’ pay and for paying employer NICs where they are due.

Secondary information

Type
Written question
Reference
13724
Session
2022-23
Subjects
Income tax Employment agencies
Legislation
Income Tax (Earnings and Pensions) Act 2003
Link
View this Written question on questions-statements.parliament.uk