I know it has been asked before but how do you determine whether to tick the personal services box on the personal tax return?
If there is more than one Director or if there is an additional employee does that mean that the company is no longer a personal service company? Please can someone help with the definition.
I asked HMRC today, they put me through to a so-called expert and they said that it was about IR35, I disagreed, it then transpired that I knew more about IR35 than them and the technical helpline is calling me back. This client provides IT services through a company, is outside IR35 and has never been a one man band. So I am not concerned about IR35 exposure from ticking the box but it would be great to know whether it has to be ticked for this or any other Ltd company service companies.
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This is a decent explanation
http://www.contractoruk.com/limited_companies/a_guide_to_personal_servic...
HMRC guidance notes
The guidance notes say: - "You provided your services through a service company 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.Do not complete this box if all the income you derived from the company was employment income."
Or perhaps not?
There are views within the accounting community that this box is not required to be completed at all, which are based on the following arguments;
This information is not necessary to calculate the income tax liabilityTherefore HMRC cannot require a taxpayer to answer the question