Dunno about you guys, but I regularly invoke my right of substitution, and also provide my skills as a substitute for other contractors when they are unavailable to work!
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Opinion seems to be unless you were substituted for more than half the work done by the company you need to answer yes/no too.Originally posted by Weltchy View Post
The theory goes... (1) as an individual you have performed services during the year, (2) services were provided under contract and you were a director or shareholder and (3) more than half the company income was derived from you doing the work.
So that is Yes/No (assuming you are outside IR35) even if you have provided a substitute and been a substitute. Although clearly this helps your IR35 status people like PCG, QDOS etc.. seem to think you must still answer yes/no.Comment
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I answered yes/no last year and will do so again this year..
It appears a bit more clear cut this year than last, but either way if you're confident you're operating outside of IR35 yes/no is perfectly valid and defendable (should it come to that).Proud owner of +5 Xeno Geek PointsComment
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The accountacyweb from the link (have you read it?) article includes the following example:
"2. A firm of accountants – two partners, and no staff
Clearly, once again we have a potential “service company” for Question 6, as this time we have a partnership. The responses to points one and two are an unequivocal “yes”. On to point three. Once again are these services performed “personally” by the partners? There is no doubt that if they are, the answer is yes and we have to go on and consider Question 2. But what if the firm employed someone? Although there are no employees at the moment, does this mean that the firm could use the services of any available and suitably qualified individual to perform the services for the client? I think they could, and here I contest the use of “personally”. Neither of the partners performs the services in his personal capacity, and the services could easily be provided by someone else within the firm. So I’m thinking “no” to point three, making part 1 a “no” again.
As I have shown, although the guidance is much improved over last year, the entire question turns on the interpretation of the word “personally” in part 1 of the question. If I am right, then the question should not be an issue for many businesses currently concerned about this issue. Part 1 being negative, part 2 follows as a negative – job done."
I'm happy with this interpretation and intend to follow it until the HMRC tell me otherwise. I am satisfied I am following their rules and therefore am not intentionally doing anything wrong.Comment
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For the last ******* time, you dont need to answer this question!Originally posted by Lewis View Post
And that is advice I have from tax counsel.I couldn't give two fornicators! Yes, really!
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Is this advice published anywhere so I can print it out and keep it in my records? What is the name of the tax counsel?Originally posted by BolshieBastard View PostComment
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Clearly the article is a discussion and people are putting forward different points of view and I have yet to come to a decision myself so I am not telling you it is one way or the other. I am asking how people interpret the wording to enable me to make a decision.Originally posted by Little'Old Me View Post
The PCG, QDOS and most accountants seem to have taken the view we should answer yes/no. I am not so happy with that interpretation and so want to get all the facts clear in my head.
The problem with the "I can substitute" argument is that there seem to be some pretty clear comments against it, such as the one I have already posted (have you read it?) which states
I was on the ICAEW committee that met HMRC on this one, and regret to inform you that they think that 'personally' means 'in person' as the last commentator suggested.Comment
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I've just done my return, answered YES/NO.
I'm your typical IT contractor but I've made sure my contract has been reviewed and found outside of IR35.
I can't see how reading the helpsheet you could answer NO to part 1 if you are (like me) a typical contractor using a Ltd. Yes I performed services for a client, yes there was a contract between the client and the company of which I was a shareholder and yes the companies income during the year was more than half dervied from those services...
So I'm taking honesty as my policy.... (probably where tax is concerned not the best option
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Quote helpsheet:
The first question should be answered yes if:
• an individual performed services (intellectual, manual
or a mixture of the two) for a client or clients, and
• the services were provided under a contract between
the client and the company of which, at any time
during the tax year, the individual performing the
services was a shareholder or partner, and
• the company’s income was, at any time during the tax
year, derived wholly or mainly (that is, more than half
of it) from the services performed by the shareholders
or partners personally.Comment
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(repeated above)Comment
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FYI -
http://www.contractoruk.com/news/004309.html
And some further reading for anyone finding this through Google:
What is a Service Company? (HMRC's definition)
IT contractors don't have to answer Q6 on P35Last edited by Contractor UK; 13 June 2011, 13:32.Comment
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