Under such an agreement, there is no contract between the charity and the worker, so the worker is not generally an employee of the charity. Similarly, the contract between the agency and the worker could be either one of employment (the agency then operating PAYE and NICs) or one of gross payment.

Where this is the case, there will be a presumption that the charity has supervision, direction, or control over the worker. If this is the case, it is the responsibility of the agency that contracts with the charity to whom the worker provides their services to operate PAYE and NICs.

When the agency does not consider that a worker is subject to (or subject to a right of) supervision, direction, or control by any person, they will need to keep evidence of this. They may therefore ask the charity whether they have supervision, direction or control of the worker.

If the charity states to the agency that they do not exercise the right of supervision, direction or control, either before or after the worker begins to provide their services, and this is incorrect, then HMRC can hold the charity liable for PAYE and NICs on payments to the worker.

HMRC has published guidance on agency rules:

• Employment Status Manual
• Employment intermediaries: personal services and supervision, direction or control