2008 Self Assessment Tax Return

[dack]

My accountant has emailed me asking what information to enter on page 4 of my 2008 Self Assesment. http://www.hmrc.gov.uk/forms/sa100.pdf

The question states:
"
Service Companies:
Total amount of any income included anywhere on this Tax
Return, derived from the provision of your services through
a service company – read page TRG 15 of the guide"

As I'll be entering 'no' for "Are you a service compnay?" on my P35, I'm not sure how to answer this. Can't seem to find any advice on PCG.

I'd be interested to hear what others are doing.

[malvolio]

There's a huge debate on this on the PCG fora. General advice for 99% of contractors is to answer Yes to the first question and No to the second. Most of the debate is about what happens if you answer No to both.

The big snag is that the terms are not celarly defined, are ambiguopus and - just to confuse things further - have no legal basis. Nor do they relate to the amount of tax to be declared on the SA form. Hence simple legal advice is impossible!

[Moscow Mule]

My accountant has emailed me asking what information to enter on page 4 of my 2008 Self Assesment. http://www.hmrc.gov.uk/forms/sa100.pdf

The question states:
"
Service Companies:
Total amount of any income included anywhere on this Tax
Return, derived from the provision of your services through
a service company – read page TRG 15 of the guide"

As I'll be entering 'no' for "Are you a service compnay?" on my P35, I'm not sure how to answer this. Can't seem to find any advice on PCG.

I'd be interested to hear what others are doing.

The guide is pretty un-ambiguous;

http://www.hmrc.gov.uk/worksheets/sa150.pdf

[VectraMan]

There's a huge debate on this on the PCG fora. General advice for 99% of contractors is to answer Yes to the first question and No to the second. Most of the debate is about what happens if you answer No to both.!

Which are the two questions you're referring too? It only says "how much income..."?

[Moscow Mule]

Which are the two questions you're referring too? It only says "how much income..."?

Mal is referring to the P35 form IIRC.

[SueEllen]

There's a huge debate on this on the PCG fora. General advice for 99% of contractors is to answer Yes to the first question and No to the second.

Have PCG quality accountants been advised to do the same?

[VectraMan]

Have PCG quality accountants been advised to do the same?

I can't remember if the P35 form is one the accountant send to me to sign, or they do it themselves.

The questions to Mal's answers seem to be:

1. Are you a service company.
2. Are you inside IR35

Certainly the SA guide is pretty clear what "service company" means:

You should complete this box if you have received any form of income (including employment income and dividends) during the year in question from a company through which you provided your services personally and of which you are a sole or joint shareholder

[Ruprect]

The guide is pretty un-ambiguous;

http://www.hmrc.gov.uk/worksheets/sa150.pdf

Jesus. This is clearly leading to a trap for contractors then... next step presumably is legislation banning dividends from "Service Companies"?

Is there any point to contracting at all?

[moorfield]

Can our accountant posters (SJD/NW/Danbro) provide any clarification on this ?

I would have thought on the P35 for most of us will be
Are you a Service Company - Yes
Have you applied IR35 - No

And on the SA return
Income derived through Service Company - Yes

And presumeably for the Income Shifters among us,
this will be No on the missus's SA return (if she needs one)
if she has not provided the services ?

It's quite a minefield isn't it ....

[moorfield]

There's a huge debate on this on the PCG fora. General advice for 99% of contractors is to answer Yes to the first question and No to the second. Most of the debate is about what happens if you answer No to both.

Safety in numbers then - if we all do that then Hector can't investigate us all !