RTI - Service Comnapy Question

[TheCyclingProgrammer]

Why do you think that advice is incorrect Spartan? I would have thought that most or all contractors would answer yes according to the parameters of the questions - most or all income would be derived from the services of the individual and the contractual arrangements would be as shown

Regardless of whether or not we consider ourselves "personal services companies" (which arguably most of our companies are), that doesn't appear to be what the question is asking to me. It's asking if we've "operated" IR35 or MSC legislation. Without defining "operated". Does it simply mean you've considered it and decided it doesn't apply? Or does it mean you've operated one or more of your contracts as inside IR35?

[TheCyclingProgrammer]

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

There is no legal definition but if HMRC have their own definition, and it's an HMRC question, then I suppose it follows that that is the definition to base your answer on.

[Craig at Nixon Williams]

Regardless of whether or not we consider ourselves "personal services companies" (which arguably most of our companies are), that doesn't appear to be what the question is asking to me. It's asking if we've "operated" IR35 or MSC legislation. Without defining "operated". Does it simply mean you've considered it and decided it doesn't apply? Or does it mean you've operated one or more of your contracts as inside IR35?

I have checked with HMRC a couple of months ago and they said the latter - if you have operated IR35 (and made a deemed payment) then you should say yes to the question, otherwise it should be no.

Craig

[TheCyclingProgrammer]

I have checked with HMRC a couple of months ago and they said the latter - if you have operated IR35 (and made a deemed payment) then you should say yes to the question, otherwise it should be no.

Craig

Thanks Craig, useful to know (although I'll double-check with my own accountant too). I assume the SAR questions for 2013-14 will remain unchanged?

[Clare@InTouch]

Thanks Craig, useful to know (although I'll double-check with my own accountant too). I assume the SAR questions for 2013-14 will remain unchanged?

It's here under Final Submission for the tax year:

HM Revenue & Customs: What to report

There's a difference between your accountant asking you if you're a service company, which is a question of fact, and the rather misleading HMRC question which means more than it actually reads!

[TheCyclingProgrammer]

There's a difference between your accountant asking you if you're a service company, which is a question of fact, and the rather misleading HMRC question which means more than it actually reads!

I must have misunderstood, was the quote in OP something InTouch sent then? I was under the impression he was quoting the submission form.

[Clare@InTouch]

I must have misunderstood, was the quote in OP something InTouch sent then? I was under the impression he was quoting the submission form.

I think the thread was a mix of the two!

[Contreras]

I must have misunderstood, was the quote in OP something InTouch sent then? I was under the impression he was quoting the submission form.

The quote was verbatim from the HMRC Basic PAYE Tools Software (RTI). Sorry, should have been clearer.

[ctdctd]

I need to answer the RTI question as well - I'll be putting "No".

My contracts are IR35 OK but my actual working practices may not be - at a level just above support monkey, it's hard to avoid Direction and Control.

To mitigate this, I pay small salary and put most of the rest in a pension. What's left, after expenses, is only a few percent - possibly within the IR35 5%.

However, I don't operate the legislation and I don't calculate any deemed payment - so the answer is "No"

It's stupidly written legislation and each iteration of the question makes it worse.

[borderreiver]

Just think of it as a conditional statement ...

answer = (isPSC && insideIR35);

So you have to be both in order to answer "yes", I would think.

IANAA but I think it would be hard for HMRC to dispute this line of reasoning. If they want more precise responses they need to be asking 2 separate questions ...