MSCs ― the deemed employment payment

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

Where the legislation on Managed Service Companies applies to a payment made to a worker, that worker is treated as receiving a deemed employment income payment, which is subject to PAYE and NICs. See the Managed service companies overview guidance note.

The calculation of the deemed employment income payment is based on the payment received by the worker in respect of the services he provides via the Managed Service Company (MSC). The calculation has to be repeated each time there is a payment to the worker that falls within the MSC rules.

The method for calculating the deemed employment payment is set out in the legislation as a 3–step method statement.

HMRC guidance on the calculation is at ESM3540.

Step One

The first step is to identify the payment or benefit which “can reasonably be taken to be in respect of the services”.

This includes any payment or benefit of any kind. A payment in this context includes the payment of a dividend.

It does not matter who has made the payment to the worker,

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Corporation Tax

Corporate interest restriction ― administrative aspects

Corporate interest restriction ― administrative aspectsThe corporate interest restriction (CIR) regime has some specific administrative rules in addition to the general administrative requirements for corporation tax returns. This guidance note does not include commentary on provisions that are

14 Jul 2020 11:19 | Produced by Tolley Read more

Trusts and Inheritance Tax

Gifts with reservation ― overview

Gifts with reservation ― overviewIntroductionA gift with reservation (GWR) arises when an individual ostensibly makes a gift of his property to another person but retains for himself some or all of the benefit of owning the property. The legislation defines a gift with reservation with reference to

14 Jul 2020 11:48 | Produced by Tolley Read more

Personal Tax

Gilts

Gilts‘Gilts’ are securities that are also known by a number of different names (eg gilt-edged securities, Government securities or treasury stock).The Government sells gilts to fund the deficit between public spending and tax receipts. Normally, the Government pays interest to the holder of the gilt

14 Jul 2020 11:48 | Produced by Tolley Read more

��Ƶ