Reply to: P35. Question 6. Service Company

[Nixon Williams]

Not according to the hand written note in this months pay advice. I'll phone in.

cheers

If it is a hand written note, it is possibly because we have some details missing but without knowing who you are I cannot check.

Please do call the office or email me and I will look into it.

Alan

[Epiphone]

I think you must have mis-read the request. We only need copies of statements etc once, this is a reminder to send your up to date details in.

So to clarify - if you have already sent copies there is no need to send it again.

Alan

Not according to the hand written note in this months pay advice. I'll phone in.

cheers

[max]

b) PCG have a vested interest in KEEPING IR35, they promote the use of Umbrella Co's.

They suggest that contractors that don't want to go down the Ltd co path, should use umbrella co's.

A long time since I visited their website but unless I'm very mistaken the last time I went there, they offered a brolly.

They don't "offer" a brolly. They suggest a brolly that won't fall foul of the UK's tax laws.

Do you think that is the wrong thing to do?

[BolshieBastard]

I am one-man Ltd. My accountant (NW) insisting I answer Question 6 as Yes in first part.

From my point of view - this is just a trick from IR to get all contractors legally shortlisted. Next year they will roll out massive attack to get money from them with very little hassle.

My question - is there any legal way to answer No on the question 6?

What is the penalty to answer No not having legal foundation to do so and be caught in future?

Just leave it blank and dont answer it. As Alexander says, 'simples'!

The advice I got was "HMRC charge penalties for incorrect returns only where there is a tax consequence arising out of an incorrect return. Whether the box is ticked or not does not in itself produce a penalty since it does not alter the tax self assessed on the return.

Any “Revenue Directive” is not particularly a directive and has been presented as a “clarification”. What HMRCy basically said was that if the box is ticked then the likelihood of an enquiry being made into that return is significantly increased, in other words they are unable to identify IR35 type companies so they would like us to do it for them."

This is from the Inst Chartered Accountants.

[maxima]

thank you Moorfield.

is it still sensible - if I have RoS than I can answer N/N ?

[Fred Bloggs]

PCG promote the use of umbrella companies? How?

A long time since I visited their website but unless I'm very mistaken the last time I went there, they offered a brolly.

[Nixon Williams]

And for Mr Nixon Williams: why do you ask for copy bank statements and expenses from the beginning of the year when you get them every month. Just easier for you guys to have them all in one envelope/email or something else..?

I think you must have mis-read the request. We only need copies of statements etc once, this is a reminder to send your up to date details in.

So to clarify - if you have already sent copies there is no need to send it again.

Alan

[Sausage Surprise]

I shall be advising No and No

[Archangel]

In this case isn't the agency your client?

Not according to HMRC when deciding whether IR35 applies. Otherwise everyone would be outside.

[moorfield]

Have a look at this thread on this question I posted last spring.

[Archangel]

a) You can't understand IR35, it changes with each case that goes to the commissioners and they make it up as they go along.

b) PCG have a vested interest in KEEPING IR35, they promote the use of Umbrella Co's.

PCG promote the use of umbrella companies? How?

[Epiphone]

Most one-man-band Ltd's will tick Yes to the first question.

And for Mr Nixon Williams: why do you ask for copy bank statements and expenses from the beginning of the year when you get them every month. Just easier for you guys to have them all in one envelope/email or something else..?

[Fred Bloggs]

a) it is nice that after all these years we now all understand IR35.

b) isn't it good the PCG have been so successful in getting rid of IR35, and so quickly too.

a) You can't understand IR35, it changes with each case that goes to the commissioners and they make it up as they go along.

b) PCG have a vested interest in KEEPING IR35, they promote the use of Umbrella Co's.

[BrowneIssue]

General whinge

a) it is nice that after all these years we now all understand IR35.

b) isn't it good the PCG have been so successful in getting rid of IR35, and so quickly too.

[Pickle2]

No, no, no, no!

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, 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 personally.

Most of your clients would be through an agent, so....

an individual performed services (intellectual, manual or a mixture of the two) for a client or clients yes

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 No, the contract is between the client and the agent, the contractor is not usually a shareholder of the agency


So the answer should be No unless you are direct to the client.

Archangel, the agency is your client. You perform services for the agent, who then resells your services to THEIR client.

The end company approached the agency to provide skills, not you.