Service Company Question in Personal Self assessment

[Ashwin2007]

Any idea, whether this should be filled in here if you are outside IR35?

If you provided your services through a service company (a company which provides your personal services to third parties) enter the total of the dividends and salary you withdrew from the company.

[expat]

Any idea, whether this should be filled in here if you are outside IR35?

If you provided your services through a service company (a company which provides your personal services to third parties) enter the total of the dividends and salary you withdrew from the company.

My understanding of it, which I would be happy to see contradicted, is:

1. It is not well-defined so you can't really say for sure. It will be decided later whether you gave the wrong answer, for which you will be punished.
2. If you are doing what most of us here are doing, the answer is probably Yes.
3. If you tick the box, HMRC will probably reckon that means you are, or should be, in IR35.

[PhilAtBFCA]

Hi expat and Aswin 2007

There is a full explanation of question TR4 for the SATr 2008-09 here

To us, it is clear that most Professional Contractors and Freelancers will have to complete this box as they fall within the definition in the article above.

Your Ir35 status does not affect whether you answer this question or not.

It is not a Yes or No box, it asks for an amount of dividends and gross income received by salary if you fall within the definition of a service company. See page TR4 of this Self Assessment Tax Returnhere

Hope that helps

Phil

[malvolio]

if you fall within the definition of a service company

Define Personal service? I provide services, I am not contractually obliged to provide them personally. Hence the answer to "Are you a service company" by their definition is No.

So the question remains as arbitrary and unanswerable as ever.

[Lewis]

if you fall within the definition of a service company

Define Personal service? I provide services, I am not contractually obliged to provide them personally. Hence the answer to "Are you a service company" by their definition is No.

So the question remains as arbitrary and unanswerable as ever.

I think this argument is no longer valid following the HMRC "clarification". It states you must say yes to (a) if:

• you performed services (intellectual, manual or a mixture of both) 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.

[xoggoth]

Bleedin' eck, is it January again already?

[malvolio]

... from services performed by the shareholders personally.

There you go. Define "Personally". If I take the contract and sub part or all of it to someone else to deliver while retaining full contractual accountabilty for delivery, am I delivering it "personally"? Or if I retain the right to do so woithout actually exercising it? How about if I deliver the services as a director and officer of MyCo - is that "personal"?

Hector is trying to get you to say you are working under a contract of service. I'm not, I'm working to a contract for services. The difference, in terms of IR35, is crucial, and it's not my problem to set the boundary, nor to assist Hector in deciding which side I sit.

Answer Yes by all means, and see them in court. Or answer No and do the same.

[Ashwin2007]

Thanks everyone for your views.

Answer Yes by all means, and see them in court. Or answer No and do the same.

As mentioned by PhilAtBFCA above, this is not yes or no question. However, filling the amount (Salary + Dividends) here would effectively mean yes (you are providing personal services), and not filling the amount here would mean no.

So, what is more risky, "yes" or "no"?

[Lewis]

Thanks everyone for your views.




As mentioned by PhilAtBFCA above, this is not yes or no question. However, filling the amount (Salary + Dividends) here would effectively mean yes (you are providing personal services), and not filling the amount here would mean no.

So, what is more risky, "yes" or "no"?

Yeah sorry I was thinking of P35. What have you put on P35 for QU 6 (a)? This has already been submitted for the year in question. If yes - you must complete amount on SA if no leave blank.

[BlasterBates]

the difference is for "yes" they charge you penalties for not paying IR35, say "no" then they charge penalties for not saying "yes" plus the IR35.