EIS relief

We act for a medical scientist Mr X who has his own private limited company Y Ltd in which he is sole director and sole shareholder.

Y Ltd provides Mr X’s consultancy services to manufacturers who need his services to develop new products and/or to assist with problems with existing products. We are satisfied that IR35 does not apply to Y Ltd.

Mr X was allotted 50 000 shares at par in a trading Company Z Ltd on 11 August 2009 prior to which he was appointed as a director of Z Ltd on 1 May 2009.

Y Ltd invoices Z Ltd for the consultancy services supplied by Mr X on a quarterly basis and the first invoice was issued on 31 August 2009 for which payment was made to Y Ltd in September 2009.

We consider that Mr X’s services do not constitute...