Personal Service Company and Isle of Man

Personal Service Company and Isle of Man

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Dear All,

I have a client who works through an intermediary (Personal Service Company) in the UK under IR35. She is about to commence work for an Isle of Man based company. As you will probably be aware IOM does not recognise PSCs and instead, taxes the "worker" as if they were employed.

Now, I have a few questions...

1. As my client is working under an intermediary, her "employer" is asking that the invoicing be through the PSC (and not as an employee). I assume that is fine?

2. If that is true, the Manx tax will be deducted from the payment to the intermediary, even though the tax is in my client's name. I assume this is correct also?

3. Now... the big question arises with the UK tax, double taxation relief and IR35. Would it be correct to ignore these payments from the IR35 calculation?

4. If so, would the income be classed as income of my client as opposed to the company?

5. Conversely, if the income is classed as company income, would my client still be able to claim double taxation relief through her tax return for the Manx tax pai?

I look forward to any advice or clarification on this matter and would like to thank you all in advance for your responses!

Many thanks and kind regards

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By daveah
07th Oct 2015 11:22

If you haven't already...
Call the Tax Office in the IoM to check your assertions on a no name basis. Their number is 01624 685400. Unlike the UK, you speak to a real person who, if they cannot advise you,
will transfer you to their superior to go through the scenario with you.
You can even email them without a clearance letter.

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