Finance (No. 2) Act 1975

38 Workers supplied by agencies

(1) Subject to the provisions of this section, where—

(a) an individual (in this section called " the worker") renders or is under an obligation to render personal services to another person (in this section called " the client") and is subject to, or to the right of, supervision, direction or control as to the manner in which he renders those services ; and

(b) the worker is supplied to the client by or through a third person (in this section called " the agency "), and renders or is under an obligation to render those services under the terms of a contract between the worker and the agency (in this section called " the relevant contract"); and

(c) remuneration receivable under or in consequence of that contract would not, apart from this section, be chargeable to income tax under Schedule E,

then, for all the purposes of the Income Tax Acts, the services which the worker renders or is under an obligation to render to the client under that contract shall be treated as if they were the duties of an office or employment held by the worker, and all remuneration receivable under or in consequence of that contract shall be treated as emoluments of that office or employment and shall be assessable to income tax under Schedule E accordingly.

(2) Subsection (1)(b) above includes cases in which the third person is an unincorporated body of which the worker is a member.

(3) Subsection (1) above shall apply whether or not the worker renders or is under an obligation to render the services in question as a partner in a firm or member of an unincorporated body; and where, in any case in which that subsection applies, the worker is a partner in a firm or a member of such a body, remuneration receivable under or in consequence of the relevant contract shall be treated for all the purposes of the Income Tax Acts as income of the worker and not as income of the firm or body.

(4) For the purposes of this section any remuneration which the client pays or provides by reason of the worker being a person who renders or is under an obligation to render the services in question shall be treated as receivable in consequence of the relevant contract.

(5) Subsection (1) above shall not apply—

(a) if the services in question are services as an actor, singer, musician or other entertainer or as a fashion, photographic or artist's model; or

(b) if the services in question are rendered wholly in the worker's own home or at other premises which are neither under the control or management of the client nor premises at which the worker is required, by reason of the nature of the services, to render them ; or

(c) if in rendering the services the worker is or would be a sub-contractor within the meaning of section 69(2) of this Act.

(6) Where an individual enters into arrangements with another person with a view to the rendering of personal services by the individual, being arrangements such that, if and when he renders any such services as a result of the arrangements, those services will be treated under subsection (1) above as if they were the duties of an office or employment held by him, then for all purposes of the Income Tax Acts any remuneration receivable under or in consequence of the arrangements shall be treated as emoluments of an office or employment held by the individual and shall be assessable to income tax under Schedule E accordingly.

(7) Where—

(a) any services which an individual renders or is under an obligation to render under a contract are treated under subsection (1) above as the duties of an office or employment held by him ; or

(b) any remuneration receivable under or in consequence of arrangements to which subsection (6) above applies is treated under that subsection as emoluments of an office or employment held by an individual,

section 15 of the [1970 c. 9.] Taxes Management Act 1970 (return of employees etc.) shall apply as if that individual were employed—

(i) in a case within paragraph to) above, by the person or each of the persons from whom he receives any remuneration under or in consequence of the contract; and

(ii) in a case within paragraph (b) above, by the other party to the arrangements,

and section 16 of that Act (return of payments made to persons other than employees) shall not apply to any payments made to that individual under or in consequence of that contract or under those arrangements.

(8) In this section " remuneration ", in relation to an individual, does not include anything in respect of which he would not have been chargeable to tax under Schedule E if it had been receivable in connection with an office or employment held by him but, subject to that, includes every form of payment and all perquisites, benefits and profits whatsoever.

(9) The preceding provisions of this section shall have effect for the year 1976-77 and subsequent years of assessment.

(10) In assessing to income tax under Case I or Case II of Schedule D any profits or gains arising or accruing in the year 1975-76 or any earlier year of assessment from any trade, profession or vocation not permanently discontinued before 6th April 1976, being profits or gains which, if subsections (1) to (8) above had had effect for that year, would have been assessable to tax under Schedule E, the trade, profession or vocation shall be treated for all the purposes of the Income Tax Acts as having been permanently discontinued on 5th April 1976:

Provided that where only part of those profits or gains would, if those subsections had had effect for that year, have been assessable to tax under Schedule E, that part shall be treated as arising or accruing from a separate trade, profession or vocation, and only that separate trade, profession or vocation shall be treated under this subsection as having been permanently discontinued as aforesaid.