Overview

An overarching contract allows temporary workers to link a series of separate assignments into a single ongoing employment with an umbrella company or employment agency. This allows the umbrella company or employment agency to treat each assignment as a temporary place of work (rather than a permanent place of work). The consequence is that, under the temporary workplace rules, the employer can effectively pay the worker for their travel expenses to such temporary workplaces free of income tax and national insurance.

Unsurprisingly, the view of HMRC towards overarching contracts has been a sceptical one. However, the publication of nine new pages to HMRC’s Employment Status Manual on 5 May 2010 demonstrates the Revenue’s keenness to clarify its position on this topic.

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