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PCG Newsletter - 7 Feb 2002 - 07/02 - Establishing status & P35

In this issue:

  • Establishing Status and contract reviews
  • PCG ‘IR35 Toolkit´ seminar road show
  • Inland Revenue extend No penalty period
  • Agencies experiencing financial difficulties
  • PCG elections
  • Members ‘yellow pages´ directory
  • Real Life Meetings


1. Establishing Status and contract reviews

Many members will have already received their P35 form for this financial year and will know that it must be returned by May 19th 2002.

In the run up to last years P35 completion, there was a rush to obtain information on status. PCG recommends that members start thinking about this as early as possible, in order to have access to the best independent advice for what is a crucial decision.

Last year PCG was able to reach agreement with the Inland Revenue regarding status decisions (and potential penalties if the IR then later disagreed with your decision) In summary, the IR required you to take ‘reasonable steps´ to establish your status:

"if you, in your capacity as employer, act prudently by taking all reasonable steps to understand and ensure that your intermediary service company or partnership meets its obligations under the service company legislation, no penalty will be imposed"

The Reasonable Steps information paper by Kevin Miller is available as a pdf or on the discussion forums:
https://www.pcgroup.org.uk/threads/showpost.pl?f=legalandaccount-37&p=0&v=c&s=5
https://www.pcgroup.org.uk/members/resources/Reasonable_Steps.pdf

The options for members are to
1) take professional advice
2) use the Inland Revenue service
3) make up your own mind, using the relevant information – and recording the decision-making process.

PCG has never recommended using the IR service, unless members are *absolutely certain* of achieving a pass:
https://www.pcgroup.org.uk/threads/showpost.pl?f=Notice-200&p=18&v=c&s=5

To make up your own mind, see the Reasonable Steps paper, and we also recommend using PCG´s online contract review service.

The online status questionnaire provides guidance for both the contract and the overall business picture. This member´s only system has been used over 5,000 times since it was launched one year ago.
https://www.pcgroup.org.uk/cr/index.html

PCG members are also able to obtain formal opinions at special PCG discounted rates, choosing from six professional advisors:

Accountax
Bond Pearce
Egos
Hazel Consultants
Lawspeed
Qdos

These are the only advisors with access to the PCG review system. It is necessary to complete the on-line PCG review before submitting for a professional opinion.

A full contract review from a professional advisor provides a clause-by-clause analysis of the submitted contract, set against the background of the contracting company working “in business on their own account”.

The reviewers highlight both positive and negative clauses and generally provide supporting case law references. Where appropriate, they are also able to provide additional advice on how the contract may be amended, in order to be considered business-to-business.

This last point is increasingly important. Well over half (closer to two-thirds) of contracts that have been submitted for professional review *pass* IR35. Of those that fail, many members are able to take advice and make amendments to turn their situation into a pass.

Taking professional advice will give you confidence and certainty for this decision. Full details at:
https://www.pcgroup.org.uk/cr/index.html

Please Note: Both Qdos and Accountax have indicated that the cost an opinion will increase from 1st March 2002.


2. PCG ‘IR35 Toolkit´ seminar

Kevin Miller will address the issue of completing the P35 form at the ‘IR35 Toolkit´ seminar roadshows in March and May. Both Dave Smith of Accountax and Ben Chaplin from Qdos join Kevin making presentations and on the Q&A panel. Seminars take place:
5 March 2002 Heathrow; Renaissance Heathrow Hotel
7 March 2002 Bristol; Holiday Inn
1 May 2002 Aberdeen; Britannia Hotel
2 May 2002 Edinburgh; Caledonian Hilton Hotel;
3 May 2002 Manchester; Renaissance Manchester Hotel
https://www.pcgroup.org.uk/resources/seminar_02_02.html


3. Inland Revenue extend NO penalty period

The Inland Revenue have again indicated that there will be *NO* penalties for an incorrect P35 in 2002, as long as certain conditions are met:


* The return (P35) is submitted by 19 May 2002
* The return (or a covering letter) says that the service company legislation applies to the employer
* An amount is included in the return for the tax and NICs due on the deemed Schedule E payment
* It is made clear in a covering letter that the amount is provisional pending finalisation of the deemed Schedule E payment calculation
* A correction to the return and accompanying documents, notifying the correct final amount for the deemed payment and the tax and NICs due is made by 31 January 2003
* Any additional tax and NICs due as a result of the correction to the return are paid by 31 January 2003.

Similarly, last year´s provisional returns needed to be paid by 31st January this year – so any member that still has this outstanding is advised to sort out their position immediately.


4. Agencies experiencing financial difficulties

A number of agencies are reported to be experiencing various degrees of financial difficulties. Members looking for further information are advised to monitor the “Client/Agency matters” discussion board.
https://www.pcgroup.org.uk/threads/wwwthreads.pl?a=l&f=agencies&v=c&s=5&p=0

In particular we are interested to hear from any members and non-members who have recently been contracting via Innovation International Ltd, or one of the related companies. Please urgently email [email protected] with “Innovation” in the title.


5. PCG elections

Dates and details for this year´s elections to the PCG Consultative Council and Board of Directors are being finalised. Now is the time to consider if you wish to stand for election. Full details of the election rules and procedures will be sent to members very soon.


6. Members ‘yellow pages´ directory

PCG members have collated a list of ‘Goods & Services´ that members are able to offer other members. If you are a potential buyer or supplier of anything from web-hosting to guitars check out:
https://www.pcgroup.org.uk/threads/showpost.pl?f=Commercial-6788&p=1&v=c&s=5

REGIONAL NEWS
- - - - - - - - - - - - - -
Real Life Meetings

For the latest information and to start a local group see
https://www.pcgroup.org.uk/threads/wwwthreads.pl?a=l&f=meet

To promote your local meet through the newsletter – email [email protected] with REGIONS in the subject matter, details of the event and a name and email contact point/or phone number for further information.

Yorkshire
* * * * * * *
Friday 8th February
Venue: Cedar Court (formerly Hilton) Hotel, Halifax (just off M62 J24)
Time: 7.30pm

Bristol
***********
A meeting / meal is being organised in Bristol on Saturday 9th February.

Farnborough
***********
Wednesday 20th February
Prince of Wales
Time: from 7:30

Glos/Wilts/Cheltenham
************
Wednesday 20th February
Golden Heart, Nettleton, nr Birdlip, Glos (A419)
From 7.30

Newcastle
***********
Wednesday 20th February
Carriage pub (Archbold Terrace - 2 minutes from Jesmond Metro station)
at 7.30pm

Wokingham
***********
Thursday 28th February
The Ship
Time: from 7:30

Welwyn
**********
Date: Thursday 28th February 2002
Time: 7:30 pm onwards
Venue: The White Horse, Mill Lane, Welwyn

Please follow this link to Real Life meetings to get involved https://www.pcgroup.org.uk/threads/wwwthreads.pl?a=l&f;=meet

Mark Roderick
(PCG Executive Team)

This newsletter is published by the Professional Contractors Group. Please feel free to circulate the newsletter to other independent contractors who you know, and who may be interested in joining the PCG. Some links in the newsletter will take you into the password-protected members' area of the PCG website. If you have forgotten your password, contact https://www.pcgroup.org.uk/scripts/public/access/form.pl

To view the Forum links in this newsletter, you must be first logged into the Forum. Further details available at https://www.pcgroup.org.uk/members/discussion_forum.html