What is the position where, in addition to making payments to the Personal Service Company/agency, a client makes payments to or in respect of the consultant direct? For example where the client reimburses travelling expenses to the consultant direct? Could the client be held liable for PAYE?

If a client makes payments to a worker in connection with duties being performed, either for direct reward, as a round sum expense allowance, or a specific reimbursement of travel which was not business travel, and the worker is an employee of another, the payments are assessable on the worker and the client should deduct tax through PAYE from payments to the worker. If a client provides non-cash benefits in connection with the employment these are also assessable on the worker. If the client makes payments of this kind to a worker in respect of a contract with a partnership, the client will not have to operate PAYE, but the amounts should be included in the calculation of the IR35 deemed payment.