Section 164A | Deduction for deemed employment payments ^F1

(1)This section applies for the purpose of calculating the profits of a trade, profession or vocation carried on by a managed service company (“the MSC”) which is treated as making a deemed employment payment in connection with the trade, profession or vocation.^F1

(2)A deduction is allowed for—^F1

(a)the amount of the deemed employment payment, and^F1

(b)the amount of any employer's national insurance contributions paid by the MSC in respect of it.^F1

(3)The deduction is allowed for the period of account in which the deemed employment payment is treated as made.^F1

(4)The amount of the deduction allowed under subsection (2) is limited to the amount that reduces the profits of the firm for the tax year to nil.^F1

(5)No deduction in respect of—^F1

(a)the deemed employment payment, or^F1

(b)any employer's national insurance contributions paid by the MSC in respect of it,^F1

may be made except in accordance with this section.

(6)In this section “deemed employment payment”, “employer's national insurance contributions” and “managed service company” have the same meaning as in Chapter 9 of Part 2 of ITEPA 2003.^F1