Part 2Employment income: charge to tax
Chapter 8Application of provisions to workers under arrangements made by intermediaries
The deemed employment payment
56Application 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 intermediary, and
b
the relevant engagements were undertaken by the worker in the course of performing the duties of that employment.
3
The deemed employment payment is treated in particular—
a
as taxable earnings from the employment for the purpose of securing that any deductions under Chapters 2 to 6 of Part 5 do not exceed the deemed employment payment; and
b
as taxable earnings from the employment for the purposes of section 232.
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 client employed the worker,
b
the worker performed the services in the course of that employment, and
c
the deemed employment payment were a payment by the client of earnings from that employment.
5
The factors are—
a
the worker being resident, ordinarily resident or domiciled outside the United Kingdom,
b
the client being resident or ordinarily resident outside the United Kingdom, and
c
the services in question being provided outside the United Kingdom.
6
Where the intermediary is a partnership or unincorporated association, the deemed employment payment is treated as received by the worker in the worker’s personal capacity and not as income of the partnership or association.
7
Where—
a
the worker is resident in the United Kingdom, F1 and
b
the services in question are provided in the United Kingdom, F2...
F2c
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the intermediary is treated as having a place of business in the United Kingdom, whether or not it in fact does so.
F38
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