Section 61N | Worker treated as receiving earnings from employment ^F1

(1)If one of Conditions A to C is met, identify the chain of two or more persons where—^F1

(a)the highest person in the chain is the client,^F1

(b)the lowest person in the chain is the intermediary, and^F1

(c)each person in the chain above the lowest makes a chain payment to the person immediately below them in the chain.^F1

(See section 61U for cases where one of Conditions A to C is treated as being met.)

(2)In this section and sections 61O to 61S—^F1

“chain payment” means a payment, or money's worth or any other benefit, that can reasonably be taken to be for the worker's services to the client,

“make”—

(a)in relation to a chain payment that is money's worth, means transfer, and

(b)in relation to a chain payment that is a benefit other than a payment or money's worth, means provide, and

“the fee-payer” means the person in the chain immediately above the lowest.

(3)The fee-payer is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment (“the deemed direct payment”), but this is subject to subsections (5) to (7) and (8A) and sections 61T , 61TA , 61V and 61WA.^F1F2F3F4

(4)The deemed direct payment is treated as made at the same time as the chain payment made by the fee-payer.^F1

(5)Unless and until the client gives a status determination statement to the worker (see section 61NA), subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to sections 61V and 61WA.^F1F5F6

(5A)Subsections (6) and (7) apply, subject to sections 61T, 61TA , 61V and 61WA, if—^F1F5F7

(a)the client has given a status determination statement to the worker,^F1F5

(b)the client is not the fee-payer, and^F1F5

(c)the fee-payer is not a qualifying person.^F1F5

(6)If there is no person in the chain below the highest and above the lowest who is a qualifying person, subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client.^F1

(7)Otherwise, subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the person in the chain who—^F1

(a)is above the lowest,^F1

(b)is a qualifying person, and^F1

(c)is lower in the chain than any other person in the chain who—^F1

(i)is above the lowest, and^F1

(ii)is a qualifying person.^F1

(8)In subsections (5) to (7) a “qualifying person” is a person who—^F1

(za)has been given by the person immediately above them in the chain the status determination statement given by the client to the worker,^F1F8

(a)is resident in the United Kingdom or has a place of business in the United Kingdom,^F1

(b)is not a person who is controlled by—^F1

(i)the worker, alone or with one or more associates of the worker, or^F1

(ii)an associate of the worker, with or without other associates of the worker, and^F1

(c)if a company, is not one in which—^F1

(i)the worker, alone or with one or more associates of the worker, or^F1

(ii)an associate of the worker, with or without other associates of the worker,^F1

has a material interest (within the meaning given by section 51(4) and (5)).

(8A)If the client is not a public authority, a person is to be treated by subsection (3) as making a deemed direct payment to the worker only if the chain payment made by the person is made in a tax year for which the client qualifies as medium or large and has a UK connection.^F1F9

(9)Condition A is that—^F1

(a)the intermediary is a company, and^F1

(b)the conditions in section 61O are met in relation to the intermediary.^F1

(10)Condition B is that—^F1

(a)the intermediary is a partnership,^F1

(b)the worker is a member of the partnership,^F1

(c)the provision of the services is by the worker as a member of the partnership, and^F1

(d)the condition in section 61P is met in relation to the intermediary.^F1

(11)Condition C is that the intermediary is an individual.^F1

(12)Where a payment, money's worth or any other benefit can reasonably be taken to be for both—^F1

(a)the worker's services to the client, and^F1

(b)anything else,^F1

then, for the purposes of this Chapter, so much of it as can, on a just and reasonable apportionment, be taken to be for the worker's services is to be treated as (and the rest is to be treated as not being) a payment, or money's worth or another benefit, that can reasonably be taken to be for the worker's services.