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. The company receives 拢1,500 each month for his services. From this amount Mr D pays himself a dividend of 拢1,150. The balance of 拢350 is paid as follows:
拢30 as an administration fee
拢50 to cover company running costs
拢120 to Mr D鈥檚 wife and
拢150 to Mr D as a wage
Mr D performs no other services for the company other than to work for the client. The company has no other income derived from Mr D鈥檚 services. Therefore, the amount he draws from the company can be linked to those services. The amount to be brought into account at Step One of the deemed payment is the full amount of 拢1,500 received by the service company.