Where income received has been subject to tax and National Insurance Contributions in accordance with the off-payroll working in the public sector rules, applicable from April 2017, no further taxes will be due.
You will show the income received and the tax and National Insurance Contributions deducted in the accounts. A person would receive a set-off for those amounts so they don’t get taxed again. For example:
Invoices raised (debit) – £72,000
Fees received (credit) +£49,548
Tax and NI deducted at source (credit) +£22,452
Taxable profit £0
The intermediary can pay them £49,548 without any further deduction of tax and National Insurance Contributions and there is no taxable profit in the above example as the fees received have already been subject to tax treatment.
You can find further detailed guidance at https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm9080 and https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm9085.
If you have any additional questions, please feel free to contact our HMRC on 0300 123 2326 (option 2).