ECH13350 - Particular Occupations: IR35 Service Company - Deemed Payment Calculation
In reviews where the IR35 legislation applies the ECO should
- check the deemed payment and associated NICs calculation
- remember intermediaries can have a combination of engagements and some may be caught and some may not
- see ESM3140 onwards for further help and information
- send details to the Business Accounts Inspector ECH6055 of
- any deemed payment
- associated NICs and
- the date on which it is treated as being made.
Most of the information needed for the calculation should be available during the normal review process. However the ECO may need to
- refer to other sources of information for example, the intermediaries accounts for the total receipts from relevant engagements
- approach the client (this should only be done with the consent of the individual concerned)
- (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Some directors of service companies have formed the impression that the IR35 legislation allows them to
- defer payment of the PAYE and NIC
- on normal salary payments made in the year
- until the deemed payment calculation is made, at the year end
This is not the case and the ECO should
- remind the director that any salary payments in the year should have PAYE and NIC deducted
- tell the director to pay the deductions to HM Revenue & Customs as normal and
- send a note to Receivables advising them
- of the facts and
- to check for in year remittances in future.
