P35 Qu 6

[Lewis]

That time of year again and I am still not sure about this question on the P35. I have read all the latest threads I can find on various sites and it still does not seem clear cut to me except it seems most experts are recommending yes/no for a IR35 not-caught company. Possibly the best thread is this one http://www.accountingweb.co.uk/cgi-b...%20%25B%20%25Y.

So what is everyone else going to answer and why?

[pmeswani]

That time of year again and I am still not sure about this question on the P35. I have read all the latest threads I can find on various sites and it still does not seem clear cut to me except it seems most experts are recommending yes/no for a IR35 not-caught company. Possibly the best thread is this one http://www.accountingweb.co.uk/cgi-b...%20%25B%20%25Y.

So what is everyone else going to answer and why?

The answer is no... Simple reason, I am not a PSC or a MSC. I am a contractor.

[Lewis]

The answer is no... Simple reason, I am not a PSC or a MSC. I am a contractor.

Not sure what the argument behind that is but if it is along the lines of I do not provide my services personally but rather my limited company provides services that just happen by chance to have been done by me on this occassion but could be anyone as I have a substitution clause this seems to no longer be valid as quoting from the link I posted

The trouble is, the guidance does not mention personal services; it asks if you performed the services personally. Yes, the services are, contractually, performed by your company, but looking at the total wording of the guidance, I think it is clear that "performing" is not a reference to which legal person is contractually liable to perform the service for the client. (Otherwise, the second bullet would not make sense.)

How you answer part 1 is likely to depend on how you interpret the word personally. Unless this has been otherwise defined in law (and I dont believe that it has) then the legal definition will be its ordinary use.

The Collins English Dictionary defines personally as an adverb :

1 without the help of others
2 in one's own opinion
3 as if referring to one's self
4 as a person (as in ..... "I don't like him personally but he is fine to work with")

Unfortunately, I think that this may cast a wider net than some previous commentators have suggested. As a sole practitioner accountant, the majority of fees that I generate are from work done 'without the help of others' and 'in my own opinion'. I would contest that in that work I dont refer to myself and I dont do the work in person as the engagement is with a company that I wholly own.

I would suggest that the elements of the definition are not mutually exclusive and therefore I am obliged to (truthfully) answer part 1 as yes. I will then answer part 2 as no.

and finally

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. My own view is that this would expand the net so much wider than companies that ought to be operating IR35, that if everyone answers this in that way the information will not be of very much use to HMRC.

[moorfield]

So what is everyone else going to answer and why?

I posted a similar question last year. Linky...

[Lewis]

I posted a similar question last year. Linky...

Yes I read that, but am wondering if anything has changed in the last year? As you know, last year HMRC had to issue a clarification and then said it doesn't matter what you answer but this year it is different. Accountants, PCG, QDOS and more seem to be saying yes/no this year.

[Pickle2]

Last year I was No / No.

My understanding is that now the question has been clarified, I will be answering yes / no, along with thousands of others, be they accoutnants, plumbers, electricians, window cleaners, child minders, financial advisors etc etc. or IT contractors.

[Lewis]

Last year I was No / No.

My understanding is that now the question has been clarified, I will be answering yes / no, along with thousands of others, be they accoutnants, plumbers, electricians, window cleaners, child minders, financial advisors etc etc. or IT contractors.

Yes this is my thinking too.

[Little'Old Me]

Last year I was No / No.

My understanding is that now the question has been clarified, I will be answering yes / no, along with thousands of others, be they accountants, plumbers, electricians, window cleaners, child minders, financial advisor's etc etc. or IT contractors.

Some will and others won't. I am answering no/no for any client that can confirm they could use others (employees or contractors) in their "contracts", or if more than 50% of their turnover is not for the Labour part of their services.

If a client is not sure, I ask them what would happen if you were unable to work for 6 months? Who would provide the services? If they would not continue to provide the services through their company, because they could not "contract it out", or employ someone to do it, then they are a "Service Company" and the answer is Yes/No. In these cases, the Company can only have an income if they can provide their personal services.

As an Accountant if I was not able to work for 6 months, I could easily arrange for someone else to work for my company and carry on the "services" for clients. I may not make much or any money, but the services provided by my company are not dependant on me, providing my personal services to the company, advantageous perhaps , but not essential.

[eazy]

HMRC Advice on Q6

HMRC Advice - Page 18

http://www.hmrc.gov.uk/helpsheets/e10.pdf

[Lewis]

Some will and others won't. I am answering no/no for any client that can confirm they could use others (employees or contractors) in their "contracts", or if more than 50% of their turnover is not for the Labour part of their services.

If a client is not sure, I ask them what would happen if you were unable to work for 6 months? Who would provide the services? If they would not continue to provide the services through their company, because they could not "contract it out", or employ someone to do it, then they are a "Service Company" and the answer is Yes/No. In these cases, the Company can only have an income if they can provide their personal services.

As an Accountant if I was not able to work for 6 months, I could easily arrange for someone else to work for my company and carry on the "services" for clients. I may not make much or any money, but the services provided by my company are not dependant on me, providing my personal services to the company, advantageous perhaps , but not essential.

Well that is exactly the logic I followed for answering last year. But as far as I can tell from reading lots of sources the "I can substitute" argument has been discredited. Opionion seems to be this year that the question is simply asking if the person did the work themselves.