HMRC have tried everything in the past to kill disguised employment – from IR35 to targeted anti-avoidance provisions for e.g. those involving employee trusts and loans. In the process the rule book has only got thicker and thicker. Now the latest is that Budget 2014 is made to target those employed through agencies – called agency workers. Once the finance bill becomes law later this summer, the new provision will become effective 6 April 2014 whereby payments made by an agency (e.g. a recruitment agency) to a worker will be classed as employment income and subject to PAYE tax and NI unless the contrary is proved i.e. that the terms and conditions of the work were consistent with that of being self-employed. The old ‘substitution’ clause will not help any more. Typically, being contractually able to send a substitute to do the work reinforced the ‘self-employed’ argument. Now the ‘substitution’ clause within a contract will be specifically disregarded whilst deciding whether or not a worker is self-employed. To add to the pain, the personal service companies (PSCs) are also likely to be caught by this rule. So far contractors could hide behind an agency (between their PSC and the client) and avoid being caught by the rules, but that is all likely to change now. Contractor better take expert advice!