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HMRC internal manual

Employment Status Manual

Basic principles: how to work out the deemed payment where the intermediary has income that is not from relevant engagements

Only those expenses and capital allowances incurred in respect of the relevant engagements, and which would satisfy the usual rules, can be deducted at Steps Three and Four. Any such apportionment should be made on the same basis as for apportioning any expense with mixed use, see EIM31661.

There is no need to make any apportionment of any other items within the deemed payment calculation since these relate to the individual worker and are not engagement specific. These will include:

  • pension contributions
  • secondary NICs paid by the intermediary, and
  • any payments or benefits in respect of which the worker is already chargeable to income tax as employment income.