ESM8100 - Basic principles: conditions of liability: where the intermediary is a company and the worker does not have a material interest - example
This example reflects only one scenario in which the amount receivable could be taken to represent remuneration for services provided by the worker.
Example
Mr D works in the construction industry through a composite service company in which he holds 4% of the ordinary share capital. »Ê¹ÚÌåÓýapp company receives £1,500 each month for his services. From this amount Mr D pays himself a dividend of £1,150. »Ê¹ÚÌåÓýapp balance of £350 is paid as follows:
£30 as an administration fee
£50 to cover company running costs
£120 to Mr D’s wife and
£150 to Mr D as a wage
Mr D performs no other services for the company other than to work for the client. »Ê¹ÚÌåÓýapp company has no other income derived from Mr D’s services. »Ê¹ÚÌåÓýapprefore, the amount he draws from the company can be linked to those services. »Ê¹ÚÌåÓýapp amount to be brought into account at Step One of the deemed payment is the full amount of £1,500 received by the service company.