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)

F2CHAPTER 10F3Workers' services provided through intermediaries to public authorities or medium or large clients

Annotations:
Amendments (Textual)
F2

Pt. 2 Ch. 10 inserted (with effect in accordance with Sch. 1 para. 16 of the amending Act) by Finance Act 2017 (c. 10), Sch. 1 para. 9

F3

Pt. 2 Ch. 10 heading substituted (with effect in accordance with Sch. 1 para. 25 of the amending Act) by Finance Act 2020 (c. 14), Sch. 1 para. 8 (with Sch. 1 paras. 30-34)

61WAF1Anti-avoidance

1

This section applies if in any case at least one relevant person in a chain participates in a relevant avoidance arrangement.

2

An arrangement is a “relevant avoidance arrangement” if its main purpose, or one of its main purposes, is to secure a tax advantage by securing that at least one of the conditions mentioned in section 61O or 61P is not met in relation to an intermediary.

3

Section 61N(3) has effect as if the reference to the fee-payer were a reference to the participating person, but—

a

section 61N(4) continues to have effect as if the reference to the fee-payer were a reference to the deemed employer, and

b

Step 1 of section 61Q(1) continues to have effect as referring to the chain payment made by the deemed employer.

4

The participating person is—

a

in a case where only one relevant person participates in the arrangement, that person;

b

in any other case the highest relevant person in the chain who participated in the arrangement and from whom HMRC considers there is a realistic prospect of recovering, within a reasonable period, the amount of tax that would have been paid (or not repaid) in the absence of the arrangement.

5

Subsection (3) has effect even though that may involve a participating person being treated as both employer and employee in relation to the deemed employment under section 61N(3).

6

In this section—

  • “arrangement” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

  • “deemed employer” means a person who would, but for this section, be treated by section 61N(3) as making a payment to the worker;

  • “relevant person” means—

    1. a

      the worker;

    2. b

      a person who is resident in the United Kingdom or who has a place of business in the United Kingdom;

  • “tax” means income tax (and “tax advantage” is to be construed accordingly”);

  • “tax advantage” includes—

    1. a

      avoidance or reduction of a charge to tax or an assessment to tax,

    2. b

      repayment or increased repayment of tax,

    3. c

      avoidance of a possible assessment to tax, and

    4. d

      deferral of a payment of tax or advancement of a repayment of tax.