ECH13350 - Particular Occupations: IR35 Service Company - Deemed Payment Calculation

In cases where the IR35 legislation applies you 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 CT caseworker ( ECH6030) 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 checking process. However you may need to

• refer to other sources of information for example, the intermediaries accounts for the total receipts from relevant engagements
• seek confirmation of any CT repayment and supplement available to set off against the amounts of tax and NIC due
• 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 you should

• remind the director that any salary payments in the year should have PAYE and NIC deducted
• resist any claims for a Regulation 72F direction ( ECH22145) as the director will not have paid tax on the deemed payment
• tell the director to pay the deductions to HMRC as normal and
• send a note to the DMO advising them
  
  
• • of the facts and
  • to check for in year remittances in future.