(1)This section applies for the purpose of calculating the profits of a trade carried on by a firm that is treated as making a deemed employment payment in connection with the trade.
(2)The amount of the deduction allowed under section 139 is limited to the amount that reduces the profits of the firm of the period of account to nil.
(3)The expenses of the firm in connection with the relevant engagements for any period of account are limited to the total of—
(a)5% of the amount taken into account at Step 1 of the calculation in section 54(1) of ITEPA 2003 (calculation of deemed employment payment), and
(b)the amount deductible at Step 3 of that calculation.
(4)In this section “deemed employment payment” and “the relevant engagements” have the same meaning as in Chapter 8 of Part 2 of ITEPA 2003 (see sections 49 and 50 of that Act).