Summer 2004 Newsletter Content Still Good Company You Cannot Be Serious! Van For The Money Double Joint Account What's Final? From Cradle... ...To Grave Home Office Property Perils One Day At A Time Two Into One Will Go Home-A-Loan Breaking The Code Europe Expands Personal Services Civil Partnerships His And Hers Contract Time E-Filing Shop Yourself

Personal Services Cases continue to be heard about 'IR35', the rule that can charge PAYE and employee NIC where an individual provides services through a 'personal service company' (PSC). If putting the company between themselves and the customer is the only thing that stops them being an employee, they will be taxed as an employee anyway. If you operate as a company and you are not caught by IR35, you pay much less in tax and NIC than you would as an employee - so being caught is an expensive business. The recent cases have not all gone the Revenue's way, but they have shown that the Revenue are keen to fight the issue. Some PSCs put terms in their contracts which are aimed at defeating an IR35 argument - they say that the PSC has the right to send any worker to fulfil the contract, and it does not have to be the principal. The Revenue tend to regard this as unrealistic and artificial, and they found a sympathetic Appeal Commissioner in two recent cases. If the reality of the situation is that the principal will do all the work, the substitution clause in the contract may not help defeat the IR35 argument. If you work through a PSC and may be caught by IR35, you are quite likely to have views about the fairness or otherwise of the rules. Unfortunately, arguments about fairness are no help - you need arguments about whether they apply. We will be pleased to advise you on what is likely to be caught and what is not.