Under paragraph 1(1)(a) of Schedule 12 FA 2000 (and the
equivalent NICs legislation), the Schedule only applied where an
individual personally performed, or was under an obligation to
perform services
for the purposes of a business carried on by
another person (“the client”). This meant that
individuals such as nannies, butlers and other domestic workers who
provided their services through an intermediary such as a service
company did not fall within the legislation.
The 2003 legislation substituted the words “for the
purposes of a business carried on by another person” with
“for another person”. It therefore removed the
limitation in the legislation that restricted its application to
those providing personal services to a business being carried on by
a client. The measure therefore brings within the scope of the
intermediaries legislation those domestic workers who provide their
services through an intermediary, such as a company.
It will apply for income tax purposes to income received by
the intermediary in 2003/04 relating to services provided after 9
April 2003.
For NICs purposes, the legislation applies to income
received by the intermediary in 2003/04 relating to services
provided after 31 August 2003.
Because of the different dates for tax and NICs, it may be
necessary to prepare separate deemed payment calculations.
