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A labour agency supplying workers to a contractor is obliged to operate PAYE even though the contract between the agency and the worker is a contract for services (ITEAPA03/s44). This means that circumstances in which an agency has to operate the Construction Industry Scheme in the role of contractor are likely to be rare. »Ê¹ÚÌåÓýapp most common circumstance is where the agency engages personal service companies to supply the workers.

Where a worker is supplied to a contractor by or through an agency and the worker carries out construction operations under the terms of a contract they have with the agency, the agency supplying the worker will be a subcontractor as far as the contractor is concerned. In all cases the contractor should apply the Scheme when making payment to the agency. »Ê¹ÚÌåÓýapp agency is just like any other private business and should register as a subcontractor to enable it to receive payments under the Scheme either gross or after the standard rate of deduction has been applied.

However where a worker is merely introduced to the contractor by an agency and carries out construction operations under the terms of a contract they have with the contractor, the Scheme does not apply to the agency.

See also CISR14070 where a UK concern is providing labour for an overseas project.