P35 Question 6

[Pickle2]

Current wisdom on PCG is 1. Yes & 2. No if outside IR35 and Yes to both if caught.

What are peoples accountants going with so far?

Out of interest, what with the agents and accountants who post here be putting on theirs?

Really? From my reading of the forums it was No/No, assuming you dont want to be considerd a personel service company. Which of course you dont. Unless you want to get shafted for IR35.

[Ruprect]

Really? From my reading of the forums it was No/No, assuming you dont want to be considerd a personel service company. Which of course you dont. Unless you want to get shafted for IR35.

seems to be reflected in the poll results too...

[Jog On]

My accountant has done it for me and the answer is No/No.

Did he explain why?

Really? From my reading of the forums it was No/No, assuming you dont want to be considerd a personel service company. Which of course you dont. Unless you want to get shafted for IR35.

Does this mean that ‘service company’ actually means personal service company? I thought there was no such definition as personal service company.

I’m just contracting to fund my plan B which is developing small software programs and info products to sell online. I have spent several thousand this last year on development, beta testing and marketing materials. Even though my first software product isn’t in the marketplace yet I’m thinking of answering no/no.

I asked my accountant who hasn’t got back to me yet on it. My question to him was:

“Even though my main aim is to develop and market e-products online and I have spent considerable resources (well over 5% of my Ltd’s gross – don’t know how that would work out if I were to be caught inside IR35) on R&D. Is the company still classed as a ‘service company’ as most of the income comes from providing contracting services?

The plan B which is going through the Ltd has made some money as well selling other people’s ebooks as an affiliate which is all on the end of year accounts.

I feel OK answering no/no even though my company’s main business model is still in development and testing phase which is being funded by contracting services :/

My accountant hasn’t got back to me yet though.

[SueEllen]

Did he explain why?

No haven't asked but did some research on accounting web before signing it.

Does this mean that ‘service company’ actually means personal service company?

No one knows because the explanation given is as clear as mud.

BTW I didn't vote as although my accountant does it for me I keep an eye on what's going on.

[Lewis]

Just to re-iterate Abbey Tax (via PCG) and QDOS both told me HMRC already know of our "service companies" from various sources. Both told me they didn't think this was a big deal and it certainly wouldn't affect their insurances irrespective of what you answered. These are the experts and if they thought it would make a difference they would presumably advise so as to attract less IR35 attention and hence less insurance claims from their policy holders. But they both recommended to me put YES NO (for non-IR35 IT Contractor). They seemed so unbothered by it and almost amused that it was causing such a stir. (usual disclaimers apply )

[Ruprect]

Just to re-iterate Abbey Tax (via PCG) and QDOS both told me HMRC already know of our "service companies" from various sources. Both told me they didn't think this was a big deal and it certainly wouldn't affect their insurances irrespective of what you answered. These are the experts and if they thought it would make a difference they would presumably advise so as to attract less IR35 attention and hence less insurance claims from their policy holders. But they both recommended to me put YES NO (for non-IR35 IT Contractor). They seemed so unbothered by it and almost amused that it was causing such a stir. (usual disclaimers apply )

presumably because they're not the ones going to be greased up and shafted with a massive tax bill at the end of it.

[DiscoStu]

Someone needs to be! Maybe we should have a poll on that too.

Doing it...

[ruth11]

presumably because they're not the ones going to be greased up and shafted with a massive tax bill at the end of it.

I think the reason they're not bothered by it, is because you can answer yes and no, and possibly get investigated as a result, but that doesn't mean that you will definitely have to pay extra tax. If you're outside IR35, it doesn't matter, does it?
It sounds to me like people who are worried about whether they're inside will try to pull the wool over HMRC by saying No, No. If HMRC already know you're a service company, this is more likely to be a trigger response, surely?

I voted yes, no. For the record. I haven't spoken to my accountant yet, but I will.

[Ruprect]

I think the reason they're not bothered by it, is because you can answer yes and no, and possibly get investigated as a result, but that doesn't mean that you will definitely have to pay extra tax. If you're outside IR35, it doesn't matter, does it?
It sounds to me like people who are worried about whether they're inside will try to pull the wool over HMRC by saying No, No. If HMRC already know you're a service company, this is more likely to be a trigger response, surely?

I voted yes, no. For the record. I haven't spoken to my accountant yet, but I will.

Sorry, I don't buy that. I see HMRC as getting you to tacitly admit to the possibility that you're inside IR35 by asking the first question. Being as there hasn't been a cohesive description of the term in the first place, why on earth would you want to concede to a description that noone understands fully in the eyes of the law?

[malvolio]

Sorry, I don't buy that. I see HMRC as getting you to tacitly admit to the possibility that you're inside IR35 by asking the first question. Being as there hasn't been a cohesive description of the term in the first place, why on earth would you want to concede to a description that noone understands fully in the eyes of the law?

Because you are required tio answer the question truthfully and in the terms given on the form, Yes is probably the truthful answer. However, if you get challenged, you can have an interesting time demonstrating that the term has no relevance to the real world and is not a tax differentiator in any way, shape or form.

The real question is the second one. Arguably you could also answer "Yes I have operated the legislation and decided that I am not liable for tax under its provisions".

The whole thing is just another NL-inspired piece of pointless carp anyway.