Corporation Tax Act 2009 section 141

Deduction for deemed employment payments

Section 141 provides a trading deduction for managed service companies that are required to make deemed employment payments to workers, ensuring that the company can offset the deemed payment and associated employer's National Insurance contributions against its trading profits.

• A managed service company (MSC) can deduct the deemed employment payment and any employer's National Insurance contributions it pays in respect of that payment when calculating its trading profits.
• The deduction is allowed in the period of account in which the deemed employment payment is treated as having been made.
• Where the MSC is a firm, the deduction is capped at the amount that would reduce the firm's profits for that period of account to nil — it cannot create or increase a loss.
• No deduction for the deemed employment payment or related employer's National Insurance contributions is permitted under any other provision — this section is the sole route for claiming such a deduction, preventing any double relief.