Employment Tax

Service provision changes

Produced by Tolley in association with Dr John McMullen, Partner, Stone King LLP and Visiting Professor of Law, Durham University
  • 21 Dec 2021 16:40

The following Employment Tax guidance note Produced by Tolley in association with Dr John McMullen, Partner, Stone King LLP and Visiting Professor of Law, Durham University provides comprehensive and up to date tax information covering:

  • Service provision changes
  • Practical assessment
  • Retention of key personnel

Service provision changes

A change of service provider may amount to a ‘service provision change’ within the meaning of the TUPE, whether or not it is also a ‘business transfer’. See the Transfer of undertakings overview guidance note.

A service provision change may involve any one of three possibilities:

OutsourcingWhere activities cease to be carried out by a business on its own behalf and are carried out instead by a contractorSI 2006/246, reg 3(1)(b)(i)
Change of contractorWhere activities cease to be carried out by a contractor on a client’s behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by another contractor on the client’s behalfSI 2006/246, reg 3(1)(b)(ii)
InsourcingWhere activities cease to be carried out by a contractor or a subsequent contractor on a client's behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are once again carried out instead by the client on his own behalfSI 2006/246, reg 3(1)(b)(iii)

These three situations involve the transfer of activities from a ‘client’ (party that will receive a service) to a ‘contractor’ (party providing the service), or back again, or from one contractor to another contractor, including professional services. In all three of these cases the TUPE rules apply if the activities remain fundamentally the same both before and after the transfer (SI 2006/246, reg 3(2A)).

In all cases, irrespective of who is providing the

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Think Tax.
Think Tolley.

Critical, comprehensive and up-to-date tax information

LEARN MORE LEARN MORE

Popular Articles

Self assessment ― estimates and provisional figures

If the taxpayer does not have sufficient information to enable them to complete the tax return in the time allowed, they should include either a best estimate or a provisional figure. The taxpayer should not either leave a box blank or enter ‘details to follow’ as HMRC will regard this as an

20 Oct 2021 10:52 | Produced by Tolley Read more Read more

Universal credit

Universal credit is a non-taxable benefit that is administered by the Department of Work and Pensions (DWP) and is available throughout the UK. It is available to individuals on low incomes whether they are in work, unemployed or self-employed. It is designed as a replacement for several ‘legacy

27 Oct 2021 16:01 | Produced by Tolley Read more Read more

Corporate interest restriction ― overview

The corporate interest restriction (CIR) essentially limits the amount of interest expense a company can deduct from its taxable profits if the interest expense is over £2 million. The actual mechanics of the CIR calculation are highly complex (the legislation is over 150 pages long) and are

05 Nov 2021 06:52 | Produced by Tolley Read more Read more