C2C1Part 2Employment income: charge to tax

Annotations:
Modifications etc. (not altering text)
C2

Pt. 2 applied (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 969(4)(a), 1329(1) (with Sch. 2 Pts. 1, 2)

F1Chapter 9Managed service companies

Annotations:
Amendments (Textual)
F1

Pt. 2 Ch. 9 inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), s. 25(2), Sch. 3 para. 4

The deemed employment payment

61GApplication of Income Tax Acts in relation to deemed employment

1

The Income Tax Acts (in particular, the PAYE provisions) apply in relation to the deemed employment payment as follows.

2

They apply as if—

a

the worker were employed by the MSC to provide the relevant services, and

b

the deemed employment payment were a payment by the MSC of earnings from that employment;

but this is subject to subsection (3).

3

No deduction under Part 5 (deductions allowed from employment income) or section 232 (mileage allowance relief) may be made from the deemed employment payment.

4

The worker is not chargeable to tax in respect of the deemed employment payment if, or to the extent that, by reason of any combination of the factors mentioned in subsection (5), the worker would not be chargeable to tax if—

a

the worker were employed by the client to perform the relevant services, and

b

the deemed employment payment were a payment by the client of earnings from that employment.

5

The factors are—

F3a

the worker being resident or domiciled outside the United Kingdom or meeting the requirement of section 26A,

b

the client being resident F2... outside the United Kingdom, and

c

the relevant services being provided outside the United Kingdom.

6

Where the MSC is a partnership and the worker is a member of the partnership, the deemed employment payment is treated as received by the worker in the worker's personal capacity and not as income of the partnership.

7

Where—

a

the worker is resident in the United Kingdom, and

b

the relevant services are provided in the United Kingdom,

the MSC is treated as having a place of business in the United Kingdom, whether or not it in fact does so.