CIS Personal service company

Tracy_Rutherford
Tracy_Rutherford Registered Posts: 19 Dedicated contributor ? ? ?
I have a client who has formed a limited company and his company installs windows he will be the main worker for the company he does have other people doing work for the limited company on an odd job for job basis. Having read the HMRC site it says that this is classed as a personal service company and he will be unable to take a low salary and make the rest up with dividends. Can anyone suggest a way I can get around this?

Thanks

Comments

  • deanshepherd
    deanshepherd Registered Posts: 1,809
    I assume you are suggesting that his contract will be caught under the IR35 rules?

    Is his contract with a single firm of glaziers?

    I would review the terms of the contract before assuming it is caught but I would think it unlikely unless it is particularly badly worded.
  • Tracy_Rutherford
    Tracy_Rutherford Registered Posts: 19 Dedicated contributor ? ? ?
    cis service company

    Hi Dean

    Yes I think im getting in a jumble with the IR 35 rules. He is the only director of the company and he does the fitting through the company. The company fits windows for various builders and home users etc. So as long as his contract is for services im ok to set him up for the low salry and dividends?

    I have just been to see another client today. He has set up a limited company too, he is an engineer contractor and has work given to his limited company through an agency. Can I set him up for the low salary and dividends to as long as his contract says the same?

    Hope i dont sound silly?

    Tracy
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    Basically, the question you should ask yourself in each job he does is would he be legitimately self-employed if you took away the company?

    For the window-fitter it sounds like he would be. For the engineer I would probably ask a few more questions like how many different companies does he work for, how long is each contract, does he work Monday to Friday 9 to 5 at the same address etc.

    If answers to those questions do point more towards employment then I would be wanting to review his contract before deciding whether IR35 applies.
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