is MSC the endgame for LTD contractors ?

[eek]

HMRC are trying to get a ruling that means if your accountant has recommended you a salary / dividend , then this falls under 'financial control', this is just one of the few points . This is a huge stretch . A few of my friends were with CK and caught up in this

If HMRC can convince a judge that constitutes financial control , then this will not only impact contractors but majority of PSC's (albeit my accountant does recommend this but i never really follow it ). With costelloe case , i think anyone with little knowledge could tell you that's MSC. CK / BOOX ruling has huge ramifications if HMRC succeed

Take it you've never read the https://forums.contractoruk.com/hmrc...companies.html thread . Everything you've posted above has been discussed many times there including the actual Costelloe judgments which provide HMRC with the justification for this additional land grab.

[goldengoose]

Take it you've never read the https://forums.contractoruk.com/hmrc...companies.html thread . Everything you've posted above has been discussed many times there including the actual Costelloe judgments which provide HMRC with the justification for this additional land grab.

Yup ! I have . But that thread is a mixed bag of things and majority speculative and mostly the opinion of members rather than legals or accountants. I already got my practises reviewed by a professional who's with the opinion that HMRC would not find myself an MSC or my ACCOUNTANT an MSCP. They are a small local accountant with multitude of clients.

But this thread was mainly to discuss if MSC is HMRC's avenue to shut down working through a PSC or make it so bloody difficult that only a small minority work in this way.

Interesting to see that with BOOX , they had a client with 90m turnover who were send a letter from HMRC who believed them to be an MSC. I really do think HMRC are not going to stop until everyone is PAYE

[jamesbrown]

But this thread was mainly to discuss if MSC is HMRC's avenue to shut down working through a PSC or make it so bloody difficult that only a small minority work in this way.

Not especially, but it is certainly true that Chapters 9 and 10 of ITEPA offer HMRC a much better cost:value proposition because, crucially, they can lump a bunch of contractors into the same bucket based on similar working practices (Chapter 10) or similar business practices (Chapter 9), rather than investigating contractors individually (Chapter 8). So, putting aside any gripes about HMRC methods and practices, the incentives created by the legislation are obvious and you cannot really criticise them for exploiting these incentives.

[eek]

It's also probably worth posting what I suspect is HMRC's naive view of how IR35 works.

Company decides to save money / ensure their staff get more by taking them on via a PSC. To do that they use agencies who suggest you create a limited company because it gives you more money and is less hassle for them. The contractor asks how should I do that and the agency provides a list of FCSA accountancy firms that pay the agency a commission for every customer referred to them.

Which is why the Chapter 9 MSC legislation is being used here because HMRC suspect that if it wasn't for the accountancy firms these people would be being paid via PAYE and so want it to be done that way.

[RobScott]

Most of the general public have a similar view, as well as most permies, and around 50% of the contractors I've met.
It's not a minority view.

And let's face facts. PSCs are an anomaly. Building contractors (which is the majority of contractors) have CIS. Other countries simply tax PSC as though they are individuals.

The reality is we are lucky that we get tax benefits at all. We get paid considerably more than permies and also pay less tax. In a country that has a huge debt, and a deficit that's only going to make the debt worse.

So look on the bright side. We don't have it anywhere near as bad as the rest of the country. And if I have to pay more tax to make a better society I am more than willing.

It is a 1st world problem really. Not unfair. And not punitive either. You can always go umbrella.

nice. fair and true statement