RTI - Service Comnapy Question

[DaveB]

The service company question has changed for this year from a 2 part question to a single question. I have enquired with HMRC about how the new format question should be answered, and was told that it should only be answered 'Yes' if the company has operated the IR35 legislation.

If you are a PSC that operates outside IR35 then it should be 'No'.

Hope this helps!
Craig

Just for clarity, as it's been quoted a few times. What exactly do they mean by "Operated the IR35 legislation"?

[The Spartan]

The service company question has changed for this year from a 2 part question to a single question. I have enquired with HMRC about how the new format question should be answered, and was told that it should only be answered 'Yes' if the company has operated the IR35 legislation.

If you are a PSC that operates outside IR35 then it should be 'No'.

Hope this helps!
Craig

Thanks Craig, this is entirely my point but perhaps I'm not getting it across correctly. I go to great lengths to ensure I operate outside IR35 with contract reviews and negotiations, ensuring my working practices are correct and possibly rubbing up clients the wrong way.

Maybe I'm reading into it more than I should but I find it better to be diligent.

[Craig at Nixon Williams]

Are you talking about RTI submission Craig as the question quoted by the OP is for 2013/14 and seems pretty clear

Yes the final RTI submission for the year.

Just for clarity, as it's been quoted a few times. What exactly do they mean by "Operated the IR35 legislation"?

By this I mean that the company has made a deemed salary payment to the employee.

Craig

[Contreras]

Are you talking about RTI submission Craig as the question quoted by the OP is for 2013/14 and seems pretty clear

Lisa, it's absolutely not clear otherwise I wouldn't have posted!

It doesn't just ask "Are you a service company?" as you seem to imply - that would be too easy.

[Clare@InTouch]

Thanks Craig, this is entirely my point but perhaps I'm not getting it across correctly. I go to great lengths to ensure I operate outside IR35 with contract reviews and negotiations, ensuring my working practices are correct and possibly rubbing up clients the wrong way.

Maybe I'm reading into it more than I should but I find it better to be diligent.

The questionnaire we issue asks two very different and separate questions - are you inside IR35, and are you a service company. Telling us you're a service company doesn't mean we'll tell HMRC that you're inside of IR35. Is that what you mean?

[The Spartan]

The questionnaire we issue asks two very different and separate questions - are you inside IR35, and are you a service company. Telling us you're a service company doesn't mean we'll tell HMRC that you're inside of IR35. Is that what you mean?

Correct unfortunately as it's a questionnaire it doesn't explain how it will relate to the P35 itself and whether a Yes or No answer will be submitted on my behalf. So if I'm correct in my assumption then InTouch will enter "No" on the P35?

[Clare@InTouch]

Correct unfortunately as it's a questionnaire it doesn't explain how it will relate to the P35 itself and whether a Yes or No answer will be submitted on my behalf. So if I'm correct in my assumption then InTouch will enter "No" on the P35?

Gotcha.

If you say that none of your contracts were inside IR35, we will state that you're not operating the IR35 or MSC legislation on the final RTI submission (which used to be the P35).

If you answer that you're a service company we'll state that on the form provided it is a separate question - which it absolutely is on our software. There is no link between being a service company and being inside of IR35 or MSC.

Just to expand on this - our software doesn't update for the new tax year until Monday, so until then we don't know how the questions will be asked. You can however be certain that we won't be telling HMRC you're inside IR35 when you're not

[MicrosoftBob]

As there is no legal definition of a service company, isn't the nature of it open to interpretation

[The Spartan]

As there is no legal definition of a service company, isn't the nature of it open to interpretation

Entirely, it's a general definition HMRC have banded about and can change on a whim when they feel it'll better suit their purposes

[DaveB]

By this I mean that the company has made a deemed salary payment to the employee.

Craig

In which case the answer should be No, as if you are outside IR35 you won't have made a deemed salary payment, so the OP was correct to challenge his accountants advice.