HMRC have published updated guidance for completion of the service companies question on the Self Assessment tax return for 2007-08 and future years. The service companies question on page TR4 of the 2007-08 Self Assessment tax return for individuals was unclear as to who should complete it.

HMRC have acknowledged this lack of clarity and have amended the guidance accordingly.

The updated guidance for 2007-08 onwards provides the following advice:

• – Complete this box if you provided your services through a service company. You provided your services through a service company if:

• you performed services (intellectual, manual or a mixture of the two) 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.

Further information, including examples, is available at http://www.hmrc.gov.uk/sa/service-companies-question.htm.