Taxes Consolidation Act 1997 section 520

Interpretation (Chapter 1)

Section 520 defines the key terms used in the professional services withholding tax (PSWT) provisions.

• PSWT must be deducted at the standard rate of income tax from payments made by accountable persons for professional services — a term that is not exhaustive but includes medical, architectural, accounting, legal, geological, insurance consultancy, advertising, auctioneering and other consultancy services; services not ordinarily within scope may attract PSWT if they form part of a wider professional services contract, even where separately invoiced.
• Certain payments are excluded from PSWT, including emoluments taxed through PAYE, payments subject to the subcontractor withholding tax regime, reimbursements between accountable persons, payments to bodies exempt from corporation tax or approved charities, locum cover payments to members of the Disabled Drivers Medical Board of Appeal made on or after 1 November 2023, and — by Revenue concession — payments between connected companies within a parent/subsidiary group (51% subsidiary).
• The tax is calculated on the VAT-exclusive amount of the payment, and stamp duties, Land Registry fees, Deed of Registration fees, Company Office fees and court fees invoiced to the accountable person are also excluded from the calculation; however, expenses reimbursed to the specified person (such as travel, subsistence, postage and printing) and late payment interest remain within the scope of PSWT even if separately invoiced.
• Credit for PSWT deducted is given against the tax liability for the period in which the related income falls, either through the annual tax return or by way of an interim refund claim during the year; where two basis periods overlap, the common period is treated as part of the second basis period, and any interval between basis periods is likewise treated as part of the second.