SCHEDULES
SCHEDULE 3Managed service companies
Part 2Calculation of profits of MSCs: deduction for deemed employment payments
Deduction for deemed employment payments for corporation tax purposes
10
1
This paragraph applies for the purpose of calculating for corporation tax purposes the profits of a business carried on by a managed service company (“the MSC”) which is treated as making a deemed employment payment in connection with the business.
2
A deduction is allowed for—
a
the amount of the deemed employment payment, and
b
the amount of any employer's national insurance contributions paid by the MSC in respect of it.
3
The deduction is allowed for the period of account in which the deemed employment payment is treated as made.
4
If the MSC is a partnership, the amount of the deduction allowed under sub-paragraph (2) is limited to the amount that reduces the profits of the partnership for the period of account to nil.
5
No deduction in respect of—
a
the deemed employment payment, or
b
any employer's national insurance contributions paid by the MSC in respect of it,
may be made except in accordance with this paragraph.
6
In this paragraph “business”, “deemed employment payment”, “employer's national insurance contributions” and “managed service company” have the same meanings as in Chapter 9 of Part 2 of ITEPA 2003.