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The Service Company Question on Form P35
Newsletter issue - May 08.
The end of year PAYE form P35 to report the total NI and tax deducted from each employee in 2007/08 has to be submitted by 19 May 2008, but this year it includes a rather confusing question in part 3 of the form. Question 6 says:
- Are you a service company? No or Yes
- If 'yes', have you operated the Intermediaries legislation (sometimes known as IR35) or the Managed Service Company Legislation?
The note below question 6 directs you to read Taxman's leaflet CWG2 for further information, but this is actually the wrong booklet, so you won't find the answer there! The Taxman has now apologised for the confusion and added some further explanation to his web site at:
http://www.hmrc.gov.uk/employers/2007-08-P35-Quest-6.htm
Essentially you should only answer 'yes' to the first part of question 6 if your business falls within the IR35 rules, or the new Managed Service Company rules. This will apply to a relatively small number of owner-managed businesses that supply the services of the shareholders to customers, under conditions where the worker would be treated as an employee of the customer if the owner-managed business did not exist. All other businesses should answer 'no'. If you are not certain whether question 6 applies to your business, talk it through with us before submitting your form P35 for 2007/08.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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