UK Intermediary Companies and Top Models: Income tax & National Insurance

[Peter Adediran]

Higly paid elite models that work through intermediary companies will have to think more about their tax positions in the UK. Especially now with the credit crunch and with nearly all clients cutting back on expenditure. On 6 April 2007 Chapter 9 ITEPA 2003, more commonly known as the Managed Service Company (“MSC”) Legislation, was introduced. The MSC Legislation applies to individuals providing their services through intermediaries which meet the definition of a Managed Service Company. An intermediary must consider whether the MSC Legislation applies before considering IR35. Intermediaries that do not meet the definition of an MSC must continue to consider IR35. If the IR35 does apply to you then you have to pay income tax and national insurance contributions on any payments that you receive during the year and report any taxable benefits. Your company or partnership will also need to work out what the deemed payment is to find out if any additional tax and NICs will be due at the end of the tax year (or earlier in some circumstances).