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Personal service companies or employment?

01 November 2017 / Sarah Thomas
Issue: 4622 / Categories: Comment & Analysis

Tax temptations


  • The apparent monetary attractions of an intermediary company.
  • If the personal service company legislation applies the worker is assumed to have received a salary.
  • The legislation applies if the worker would be treated as an employee of the client company if not for the intermediary.
  • Some deductions can be taken into account when calculating the deemed salary.
  • Secondary Class 1 National Insurance contributions become the liability of the intermediary company.
  • The question of whether there is an employee/employer relationship needs careful consideration.

After a busy week teaching I was looking forward to a quiet drink and catch-up with – my nephew; let’s call him David. He arrived quite excited because having worked as an employee for many years he had just agreed with...

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