ESM3015 – Introduction: key terms

Paragraph 1(1) Schedule 12 Finance Act 2000/Section 49(1) ITEPA 2003

Regulation 2(1) SI 2000 No.727

The key terms used in the legislation are:

Client – the person for whom the worker provides the services. This could be any third party in the contractual chain. See ESM3050 for more detail.

Company - means any body corporate or unincorporated association, but not a partnership.

Deemed Schedule E (or employment) payment/ attributable earnings – the amount the intermediary is treated as paying to the worker under the legislation, which is chargeable to income tax under Schedule E/as employment income and subject to Class 1 NICs. ("Deemed Schedule E/employment payment" is the term used in the tax legislation; "attributable earnings" in the NICs legislation. For simplicity, the rest of the guidance refers only to "deemed payment" but should also be taken to mean "attributable earnings" unless stated otherwise).

Intermediary – the third party through which the worker provides his or her services.

An intermediary could be:

• a company (commonly referred to as a service company)
• a partnership
• an unincorporated association
• an individual.

– all engagements which would meet the definition of employment with the client, in relation to which the intermediary is treated as making a payment to the worker in the tax year.

Worker – the individual who personally performs the services for the client.