Reply to: self assessment - Service Co question ?

[turbo]

Right, nearly that time of year again where we all rush to get the self assessments in.

My accountant recons it should be left blank again this year. Just wanted to find out what other people's accountants are recommending.

I think I answered Yes/No on the P35, so wondering whether I should be filling it in this year.

turbo

[ninjakettle]

I'm filling out my 2008/09 SA tax return now and i'm not sure if i should fill in the "Service Companies" section on TR4?

Has there been a consensus on this yet - does filling this out mark you as caught be IR35?

[turbo]

My accountant just advised to leave it blank.

[Earlyflash1]

I for one will not be second-guessing what the 'intent' of the Revenue is, but the actual wording of what they ask.

If they don't ask what they actually mean, that's hardly my problem.

[Archangel]

I should add, that it is difficult to see how any IT contractor shuld leave it blank.

Its basically asking do you work in a service industry for a company that you also own or part own and pay yourself via a mix of PAYE and dividends.

Then it should ask that! Sheesh.

I answered the question honestly given the guidence quoted above (well actually I ignored the question).

What is "difficult to see" about that.

I am not a mind reader, perhaps the question was designed to only apply to direct contractors, and not those via an agency?

[Pickle2]

I should add, that it is difficult to see how any IT contractor shuld leave it blank.

Its basically asking do you work in a service industry for a company that you also own or part own and pay yourself via a mix of PAYE and dividends.

[Pickle2]

I spoke with the accoutnant last night. He is non IT contractor specialist.

His firms advice has been to fill it in. Indeed , they have been filling it for lots of their clients. Plumbers, tax consultant, financial advisors etc etc.

This seems to be the general industry advice dished out to generalist accountants.

It will be difficult for hector to spot contractors from the general delluge of people filling it in.

At least thats my hope!

[Earlyflash1]

Your client is the agency. The agency's client is where the services are performed.

It's very vague and going to be ignored (something on accountingweb & here can't remember exactly though).

Actually, my contrat names the client specifically. Whilst the contract is between my company and the agency, the client is specifically named in the contract.

So on that basis, it should be left blank.

[Moscow Mule]

Please read my reply again.

1) Yes My company supplied services to the client

2) No I don't have shares in the company who have the contract with the client (i.e. the agency)

Your client is the agency. The agency's client is where the services are performed.

It's very vague and going to be ignored (something on accountingweb & here can't remember exactly though).

[Archangel]

That is not correct. You are supplying the services to the client, even though your contract is with an agency. This has been well documented previously on this forum.

Please read my reply again.

1) Yes My company supplied services to the client

2) No I don't have shares in the company who have the contract with the client (i.e. the agency)

[Dark Black]

That is not correct. You are supplying the services to the client, even though your contract is with an agency. This has been well documented previously on this forum.

I concur with ArchAngel - services are supplied to the client however my company's contract is with the agency and not direct with client, so in the 3 pointers, #1 is a yes but #2 is a no.

Based on that anaylsis I also left the question blank. All this just goes to show that is very open to interpretation. I fully expect the question and/or the guidence to be heavily reworded.

[slackbloke]

So:

1) I did the work,
2) My services were provided under a contract between the client and an agency. I am not and never have been a shareholder,
3) Irrelevent (all 3 must be yes)

So no need to fill it in if your company supplies services via an agent.

That is not correct. You are supplying the services to the client, even though your contract is with an agency. This has been well documented previously on this forum.

[Archangel]

Whether your contract is IR35 friendly or not is irrelevant. The HMRC guidance is :

Service companies

Complete this box if you provided your services through a service company. You provided your services through a service company if:

* you 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(s) and a company of which you were, at any time during the tax year, a shareholder; 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 services performed by the shareholders personally

So:

1) I did the work,
2) My services were provided under a contract between the client and an agency. I am not and never have been a shareholder,
3) Irrelevent (all 3 must be yes)

So no need to fill it in if your company supplies services via an agent.

[rl4engc]

From what I read on the PCG document, it seems to be just be an easy way for HMRC to get a list of "One man band" Limited Company contractors. They can/do work out this information from other sources, but that costs them time and money.

The answer to the question doesn't have any tax implications, since the money taken as dividends is documented in the Dividends section.

I can't remember whether I left the amount blank or typed 0.00 in.

[slackbloke]

I've left mine blank and put the dividends from my company into the "UK Dividends" section. As far as I know I'm not a "Service Company", and I recall one bit of the SA help section said "You'll know if you are" (!?)

That's not to say it's correct, but if the other folks on here can provide a census. I may be different as my contract is very IR35 friendly with gems such as "I am not under the control of anyone" and "I can work for anyone else when I want"

Rob

Whether your contract is IR35 friendly or not is irrelevant. The HMRC guidance is :

Service companies

Complete this box if you provided your services through a service company. You provided your services through a service company if:

* you 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(s) and a company of which you were, at any time during the tax year, a shareholder; 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 services performed by the shareholders personally