Section 688A — Income Tax (Earnings and Pensions) Act 2003: Managed service companies: recovery from other persons

Managed service companies: recovery from other persons 688A 1 PAYE regulations may make provision authorising the recovery from a person within subsection (2) of any amount that an officer of Revenue and Customs considers should have been deducted by a managed service company (“the MSC ”) from a payment of, or on account of, PAYE income of an individual.

2 The persons are—

a a director or other office-holder, or an associate, of the MSC , b an MSC provider, c a person who (directly or indirectly) has encouraged or been actively involved in the provision by the MSC of the services of the individual, and d a director or other office-holder, or an associate, of a person (other than an individual) who is within paragraph (b) or (c).

3 A person does not fall within subsection (2)(c) merely by virtue of—

a providing legal or accountancy advice in a professional capacity, or b placing the individual with persons who wish to obtain the services of the individual (including by contracting with the MSC for the provision of those services).

4 The supplementary provision that may be made by the regulations includes provision as to the liability of one person within subsection (2) to another such person.

5 In this section— “ associate ” has the meaning given by section 61I, “ director ” has the meaning given by section 67, “ managed service company ” has the meaning given by section 61B but for the purposes of section 339A has the meaning given by subsection (11) of that section , and “ MSC provider ” means an MSC provider who is involved with the MSC (within the meaning of section 61B).

6 Section 61C(4) (extended meaning of “associate”) applies for the purposes of subsection (2)(d).

7 The Treasury may by order amend this section (but not this subsection or subsection (8)).

8 The Treasury must not make an order under subsection (7) unless a draft of it has been laid before and approved by a resolution of the House of Commons.