Contractors making their final Full Payment Submission (FPS) or Employer Payment Summary (EPS) 2013/14 under RTI will be confronted by the now familiar service company question.
In previous year’s end of year return, form P35 asked:
Are you a service company, yes or no?
If yes have you operated the Intermediaries legislation (sometimes known as IR35) or the MSC legislation, yes or no?
Under RTI however the question has become:
|Field name||What you must put in this field|
|Service Company||‘Yes’ if you are a service company – ‘service company’ includes a limited company, a limited liability partnership or a partnership (but not a sole trader) – and have operated the Intermediaries legislation (Chapter 8, Part 2, Income Tax (Earnings and Pensions) Act 2003 (ITEPA), sometimes known as IR35). Otherwise indicate ‘No’.|
This question then should only be answered positively by those PSC’s who have operated IR35, which will then alert HMRC that the scheme falls into the special arrangements for IR35.
Those contractors using SAGE payroll should however beware as apparently their software simply asks the question, ‘Are you a service company?’. This would then cause an incorrect response to the intended question if IR35 was not applicable.