Section 312G — Income Tax (Earnings and Pensions) Act 2003: “Service company”

“Service company” 312G 1 For the purposes of section 312B, “ service company ” means—

a a managed service company within the meaning of section 61B, or b a company (“SC”) in respect of which Conditions A and B are met.

2 Condition A is that the business carried on by SC consists substantially of the provision of the services of persons employed by it.

3 Condition B is that the majority of those services are provided to persons—

a to whom subsection (4) applies, but b who are not members of the same group as the company which makes the payment.

4 This subsection applies to—

a a person who controls or has controlled, or two or more persons who together control or have controlled, SC or any company of which SC is a 51% subsidiary at the time the payment is made, b a person who, or two or more persons who together, at any time before the time the payment is made—

i employed all or a majority of the employees of SC, or ii employed all or a majority of the employees of SC and other companies which are members of the same group as SC at the time the payment is made (taken together),

and c any company which is a 51% subsidiary of, controlled by or connected or associated with, any person within paragraph (a) or (b).

5 For the purposes of subsection (4)—

a a partnership is to be treated as a single person, and b where a partner (alone or together with others) has control of a company, the partnership is to be treated as having (in the same way) control of that company.

6 The following provisions apply for the purposes of this section—

a section 449 of CTA 2010 (“associated company”);

b section 995 of ITA 2007 (meaning of “control”);

c section 286 of TCGA 1992 (connected persons: interpretation).