The following section shall be inserted after section 201 of the Taxes Act 1988—
(1)Where emoluments of an employment to which this section applies fall to be charged to tax for a year of assessment for which this section applies, there may be deducted from the emoluments of the employment to be charged to tax for the year—
(a)fees falling within subsection (2) below, and
(b)any additional amount paid by the employee in respect of value added tax charged by reference to those fees.
(2)Fees fall within this subsection if—
(a)they are paid by the employee to another person,
(b)they are paid under a contract made between the employee and the other person, who agrees under the contract to act as an agent of the employee in connection with the employment,
(c)at each time any of the fees are paid the other person carries on an employment agency with a view to profit and holds a current licence for the agency,
(d)they are calculated as a percentage of the emoluments of the employment or as a percentage of part of those emoluments, and
(e)they are defrayed out of the emoluments of the employment falling to be charged to tax for the year concerned.
(3)For the purposes of subsection (2) above—
(a)“employment agency” means an employment agency within the meaning given by section 13(2) of the [1973 c. 35.] Employment Agencies Act 1973, and
(b)a person holds a current licence for an employment agency if he holds a current licence under that Act authorising him to carry on the agency.
(4)The amount which may be deducted by virtue of this section shall not exceed 17.5 per cent. of the emoluments of the employment falling to be charged to tax for the year concerned.
(5)This section applies to employment as an actor, singer, musician, dancer or theatrical artist.
(6)This section applies for the year 1990–91 and subsequent years of assessment.”