Service companies

19 June 2012

Issue: 4358 / Categories: Forum & Feedback , Admin , Business , Income Tax

The personal self-assessment tax return has a new question asking for details of remuneration and dividends from a service company. This replaces the question that used to be on the P35 end of year return

I read with interest that HMRC have finally admitted that the box on the P35 which asked whether the company was a service company has no statutory basis as I had always held back from complying with this.

However HMRC are not giving in gracefully. The 2012 self-assessment tax return has a section requiring details of salary and dividends if one derives income from a service company. The explanation of what constitutes a service company is found in SA150 at page TRG 21.

The definition given will catch a lot of companies not just IR35 companies. For example a one man band accountant would be caught.

What do other readers think of this new question? Can we ignore the question on the same basis that we ignored the non-statutory request on the employers’ end of year returns forms P35 or does the inclusion of the...

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