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IR35
An article on the subject of composite service companies was included in Tax Bulletin 60. It covered the working arrangements within such companies and it indicated that the companies would need to consider whether the service company legislation (IR35) applies to engagements undertaken by individual workers. This article makes it clear that managed service companies are in the same position and gives details of two areas where Revenue compliance teams find frequent errors with the service company legislation. These are as follows:
* Some workers notably teachers cleaners and entertainers are deemed to be employed earners for National Insurance. This means that they are within the service company legislation for National Insurance irrespective of whether they are within it for tax. The same is true of those holding non-executive directorships via a service company.
* Some workers have...
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