Income Tax (Earnings and Pensions) Act 2003 section 50

Worker treated as receiving earnings from employment

Section 50 establishes when an intermediary (such as a personal service company) is treated as making a taxable payment — known as the "deemed employment payment" — to a worker who provides services through that intermediary, and how that payment is timed.

• Where the client qualifies as small or has no UK connection, and the intermediary meets specified conditions, any non-employment-income payment or benefit (or right to one) flowing from the intermediary to the worker or an associate triggers a deemed employment payment that is taxed as employment earnings.
• A single deemed employment payment covers all qualifying engagements between the worker and the intermediary in the same tax year, and is normally treated as made at the end of that tax year (though an earlier date can apply in certain circumstances).
• The small client exemption is overridden in two situations: first, where the client is treated as medium or large under the off-payroll working rules; and second, where the client is an individual receiving the services for non-business purposes.
• The term "relevant engagements" is used throughout the Chapter to mean all the engagements in the tax year for which the intermediary is treated as making a deemed employment payment to the worker.