Service company disclosures

The self-assessment tax return asks for those with service company income to disclose it separately. The definition of a service company has changed in the 2015 guidance (SA105 page TRG10). There is no longer a reference to the income being 'derived wholly or mainly' by the performance of the shareholders. Is this an example of simplifying the guidance notes or a change in HMRC policy? As there is no statutory definition there is nothing to refer back to.

For reference, in previous years the guidance has included a definition of a service company as follows:

You provided your services through a service company if:

• you performed services (intellectual, manual or a mixture of both) for a client (or clients), and

• the services were provided under a contract between the client(s) and a company of which you were, at any time during the tax year, a shareholder, and

• the company’s income was, at any time during the tax year, derived wholly or mainly (that is, more than half of it) from services performed by the shareholders personally. Do not complete this box if all the income you derived from the company was employment income.

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