Difference between Trading Company and Personal Service Co

[jwm1]

Just want to check what the difference is between a trading company and a personal service company?

Is a personal service company just one that is caught by IR35?

I am a contractor and have had my various contracts over the past few years reviewed by Accountax who have advised me that in their opinion they would not be caught by IR35.

Do I need to be notifying the revenue that I am a personal service co or a trading co and do they need to give me some sort of sign off agreeing I am not caught by IR35?

Apoligies if this has been covered previoulsy

[Simon Sweetman]

A "personal service company" is a trading company and whether you are caught by IR35 is nothing to do with a name. A personal service company is essentially one that exists mainly to sell one person's services.

You and the company make self assessment tax returns, so if you do not think you are caught by IR35 (and I would expect Accountax's advice to be good) then you make your returns on that basis. If HMRC thinks different it will come and ask you.

They will give opinions on particular contracts but I would not recommend that : obviously they tend to say that they are caught.

[jwm1]

Thanks for that Simon.

Do I need to refer to my company as a Personal Service Company to any of the taxation authorities or anyone else for that matter? I do not remember seeing any forms that asked a question like that?