SCHEDULE 12 Provision of services through an intermediary
Part III Supplementary provisions
Calculation of profits of intermediary: special rules for partnerships
18
(1)
The following provisions apply in calculating for tax purposes the profits of a business carried on by a partnership that is treated as making in connection with that business a F1deemed employment payment .
(2)
The amount of the deduction allowed under paragraph 17 is limited to the amount that reduces the profits of the partnership for the tax year to nil.
(3)
To the extent that in any tax year the expenses of the partnership in connection with the relevant engagements exceed the sum of—
F2(a)
the amount that, in calculating the deemed F3the employment income Parts of the Income Tax (Earnings and Pensions) Act 2003 payment, is deducted under Step Three of the calculation in paragraph 7, and
(b)
5% of the amount taken into account in Step One of the calculation in paragraph 7 as the intermediary’s receipts in respect of the relevant engagements,
they shall be left out of account in calculating the profits of the business.