Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how his Department determines who the employer is between the promoter and end user client engaged in the loan charge scheme in circumstances where HMRC and Customs Digital Technology Services are also the engagers of a contractor using a loan scheme.

Where a contractor is engaged, the identity of the employer will depend on the facts of the engagement and the tax rules that apply to that engagement. For example, if a contractor is employed by an employment agency or umbrella company, who then supply the contractor to the client organisation, that agency or umbrella company will be the employer.

Conversely, where the Agency legislation applies to an engagement, the first agency in the labour supply chain is usually deemed to be the employer for tax purposes. However, if the contractor is engaged under the current off-payroll working legislation, the person who pays the contractor’s intermediary will be the deemed employer for tax purposes. From 6 April 2021, the off-payroll working rules are changing so that the deemed employer will be the party in the labour supply chain who meets the relevant conditions.