The definition of externally provided workers is based on the income tax rules for agency workers at Section 44 Income Tax (Earnings and Pensions) Act 2003 which require staffing providers to operate PAYE in relation to individual workers supplied to clients. The main difference is that the externally provided worker rules also apply where the worker is an employee of the staff provider.
A person is an externally provided worker in relation to the claimant company if the following conditions are satisfied:
(1)they are an individual (not a company)
(2)they are not a director or employee of the company