skip to navigationskip to main content

Phone: 01372 365 839 

Email:

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.

Choosing a Service

Choosing an accountant that matches your needs

What Our Clients Say

Read the reviews from some of our satisfied clients

Free Initial Consultation

Understanding your accountancy requirements

Request a Callback

Lets talk at a more convenient time for you

Great reasons and promises we make to you which is why you should call us before deciding on your accountant.

Our Promises

We’re a dedicated team which strives to provide success to our clients in regards to all their accountancy needs.

Meet our team