The deemed payment is treated as a payment chargeable as employment income. The tax treatment of this payment will therefore depend not on the residence status of the client but on the residence status of the worker and the location in which the duties of the contract are carried out.
If you are resident and ordinarily resident in the UK for tax purposes, then the deemed payment will be taxable in the UK, regardless of where the duties are carried out. If you are resident but not ordinarily resident you are taxable in the UK on all emoluments (deemed payments) arising from duties performed in the UK and on remittances to the UK of payments arising in respect of overseas duties.
Further information about the residence rules can be obtained from HMRC booklet HMRC6 Residence, Domicile and the Remittance Basis (PDF 560). This booklet describes the residence rules and how to work out whether or not you are resident in the UK for tax purposes.
