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You may have noticed on the new self assessment tax return that HM Revenue & Customs are now asking if you are operating as a serviced company. HMRC's guidance asks that you "Complete this box if you have received any form of income (including employment income and dividends) during the year in question from a company through which you provided your services personally and of which you are a sole or joint shareholder." |
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It also states "Do not complete this box if you are a shareholder and company officer of a company and the company's income is derived wholly or mainly from the provision of the services of company employees whose total income is treated as employment income, or derived wholly or mainly from the manufacture/provision of goods."
What does this mean for my business?
If you have only a small amount of customers to whom you provide your services and trade as a limited company then there is a risk that you will be treated as an employee of your customer.
This would severely limit the expenses that you would be able to claim through the business and also force you to pay PAYE on your total income from these types of contract. The normal route of taking earnings as a mix of low salary topped up by dividends (on which you do not have to pay National Insurance) is closed to you.
For more information about IR35 and the support we can give, please click here.
What can I do to address this?
The most important answer here is to seek professional advice. TaxAssist Accountants have experienced accountants suited to your needs. We also have insurance to protect your tax position in order to give you peace of mind.
If you would like to speak with a TaxAssist Accountant then call us now on 0800 0523 555 or fill out our contact form for a free consultation.
Printable 'Are you affected by IR35?' Page
Text 'Tax' to 60300 with your name and postcode.