Over recent years a number of anti-avoidance measures have been introduced in a bid to tackle “disguised employment”. Disguised employment refers to those situations where arrangements are implemented to falsely treat employees or workers as self-employed, primarily to gain a tax or National Insurance Contributions (NICs) advantage.

This Inbrief focuses on the employment intermediary or agency rules. These measures, which were introduced in April 2014, are concerned with the PAYE and NICs position where UK individuals are provided to a UK business via any third party or intermediary, whether based onshore or offshore (such as an agency or employment business). We also touch on the “umbrella company” rules that apply from 6 April 2026, which are likely to impact most employment intermediaries.

There are separate rules for intermediaries in the oil and gas industry which are not covered by this Inbrief.

The content includes:

Onshore employment intermediary rules

Under the rules, if a UK-based intermediary supplies an individual to an end user, the individual is treated as an employee of the intermediary which has the direct contractual relationship with the end user (‘Intermediary 1’) unless one of the exceptions below applies.

This means that (subject to a limited exception in the case of fraud by the end user or another entity in the supply chain with which Intermediary 1 has a direct contractual relationship) Intermediary 1 is required to make PAYE and employee NICs...

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