No way round new MSC rules?

**vyas** · 23 March 2007, 21:31

My experience with this is that you are better off with your own ltd company (leave your msc provider..) I remember reading somewhere on PCG that you may have problems if you are continuing with your MSC even as a psc.

Also there may be other alternatives like umbrellas like parasol it.

As long as you have your ltd company and company bank account set up this coming week, then you should be able to deal with your agency to set up a contract from the 5th / 6th of april. Give notice to your MSC and leave them no later than the 5th april.

Who are you with ?

**Olly** · 24 March 2007, 09:41

Originally posted by vyas

My experience with this is that you are better off with your own ltd company (leave your msc provider..) I remember reading somewhere on PCG that you may have problems if you are continuing with your MSC even as a psc.

Also there may be other alternatives like umbrellas like parasol it.

As long as you have your ltd company and company bank account set up this coming week, then you should be able to deal with your agency to set up a contract from the 5th / 6th of april. Give notice to your MSC and leave them no later than the 5th april.

Who are you with ?

The quote isn't clear is it - is it saying and that an organisation like theirs cant help me run my own Ltd company?
I don't know what I'm fussing about. I offer my services to multiple clients, I may even employ staff to help in the future. If that's not a Ltd company (and therfore can benefit from paying corporation tax and not PAYE + let my claim expenses off the tax liability) then I don't know what is

**cojak** · 24 March 2007, 10:50

Yes - arranging to set up a Ltd yourself is going to help matters. Getting the MSC to do it isn't.

The quote isn't clear because they know that if it was you would immediately give them notice.

Go to an accountant and get them to set up your Ltd on your behalf. I use Quest Accounting Services but Nixon Williams is good as is SJD.

**jh0711** · 26 March 2007, 09:08

anyone coming out of an MSC and setting up Ltd (by whatever method) will be in for close scrutiny from HMRC - do not believe anyone who tells you otherwise

probably

**Bluebird** · 26 March 2007, 09:57

Originally posted by jh0711

anyone coming out of an MSC and setting up Ltd (by whatever method) will be in for close scrutiny from HMRC - do not believe anyone who tells you otherwise

probably

even more so for those who use "another" product from the company that used the MSC.

**Bigbird** · 26 March 2007, 11:29

The important bit of the new legislation apparently is going to be the definition of the "scheme provider".

Basically if the service your provider gives you fits the definition of a "scheme" (see Section 61B in the new legislation according to the HMRC bod I was speaking to last week) then regardless of what YOU do or how you do it the new legislation will apply and you will have to pay PAYE on your full earnings (less legitimate expenses obviously).

If you manage your own company but engage someone who does not fit the definition of a "scheme provider" to provide services to you then you should be OK. Except then you still come within the remit of the intermediaries legislation (IR35) - happy days!

I can't get my head round all these MSC scheme providers who are saying to their contractors "we will incorporate a Co for you and you can carry on as before" because right from the initial draft document HMRC have made it absolutely clear that the legislation will apply equally to PSCs if they fit the definition of managed. The main thing they are not saying of course being "if we are wrong and you get a big tax bill you will be personally liable under the 3rd party recovery proposals even though it's a company debt and we told you it would be OK" so only a small worry there then eh?

**simondolan** · 26 March 2007, 11:30

Originally posted by jh0711

anyone coming out of an MSC and setting up Ltd (by whatever method) will be in for close scrutiny from HMRC - do not believe anyone who tells you otherwise

probably

No, the ones likely to be under scrutiny are the ones choosing to use a new "scheme" offered by one of the old Composites/MSC providers.

As has been said before, there are two clear choices:

1. Umbrella - PAYE on all your income
2. Own Ltd Co - salary/dividends.

**jh0711** · 26 March 2007, 11:55

No, the ones likely to be under scrutiny are the ones choosing to use a new "scheme" offered by one of the old Composites/MSC providers.

As has been said before, there are two clear choices:

1. Umbrella - PAYE on all your income
2. Own Ltd Co - salary/dividends

true but allegedly MSC used to be very 'loose' in their intepretation of IR35 legisltation and so if you use an MSC and then set up a LTD co (via whoever) then expect an IR35 investigation also

as long as you are confident you are outside of IR35 no problems but for lots of contractors I do not believe their working practices are outside IR35 - even thought the contract may be written in a way to indicate this.

I suppose we shall see but it will be interesting.

**Bluebird** · 26 March 2007, 12:20

The best thing to do is set up as an accountcy business, charge shed loads to manage contractors businesses & setting up of companies and you'll be fine - no IR35 whatsoever

No way round new MSC rules?