Definition of "professional accountants" in the context of MSC providers

[tim123]

On their website

and another one bites the (PSC) dust .... It's divide and rule tactics by big bad broon

Filetravel operated a composite company structure.

It is not a surprise that they are affected, it's more surprising that they though they wouldn't be.

tim

[Bluebird]

The more I read about this, the more I believe that moving from the SJD, NW + any others is a good more for contractors.


Perhaps using a local accountant or doing it yourself would be better...

[simondolan]

The more I read about this, the more I believe that moving from the SJD, NW + any others is a good more for contractors.


Perhaps using a local accountant or doing it yourself would be better...

SJD were never, and have never been Composite Company providers. We are simply accountants -no different to High Street firms.

Indeed SJD are a effectively a network of several different "high street practices" throughout the UK.

Filetravel and Giant have pulled out because they were composite company providers and would have been caught.

[Bluebird]

SJD were never, and have never been Composite Company providers. We are simply accountants -no different to High Street firms.

Indeed SJD are a effectively a network of several different "high street practices" throughout the UK.

Filetravel and Giant have pulled out because they were composite company providers and would have been caught.

I do understand what you're saying Simon, and I guess along with a lot of others there has been a lot of heresay and rumour because the gvt haven't been able to issue definitive definitions of what they mean.

However, it would seem a logical step that once MSC's are defunct, then the next step would be to look at the "accountants" that provide services to the IT Contracting Industry.

Now that the MSCs have gone, the number of IT contractors using SJD, NW etc has increased, and therefore may make you a better proposition for HR to try and catch within the net of the legislation - perhaps thats why they want it to be vague - chase all the little fishes into one or two big nets and then catch them all.

If all IT contractors used small local accountants it would make HMRCs job a lot harder.

I'm not saying for a minute that the new legislation catches you or your clients [ I'm one of them ] but I'm just 2nd guessing the next step.

Do you think that the amount of contractors who have moved to PAYE from MSC will placate the HR or do you think they'll come looking for more ?

[tim123]

However, it would seem a logical step that once MSC's are defunct, then the next step would be to look at the "accountants" that provide services to the IT Contracting Industry.

I don't agree that it's a logical step.

Contractors working through 'mycos' and HMG got along fine (IR35 notwithstanding) for 30+ years until along one day came the cancer of MSCs and a load of contractor wannabies jumped on.

IMHO (and that of lots of others) MSCs have no place in the market, are not needed as a trading vehicle and were only invented because someone saw a way to make a buck selling them.

It was right that that rules were introduced to outlaw them, and there is no reason whatsoever that just because they have been, there should be steps to ban some other way of trading.

tim

[malvolio]

If all IT contractors used small local accountants it would make HMRCs job a lot harder.

I used to use small local accountants, then I switched to SJD (as it happens). From my viewpoint I'll use a small local accountant again if they can get the equivalent of a PCG QA accreditation, or demonstrate that they can do so, for significantly less money (not forgetting my frequent assertion that all good accountants are free). Any damn fool can run a P&L for a one-man band, it's industry-specific tax advice you need.

Incidentally, many of HMGs suppliers are actually multi-sited accountancy firms with a lot of freelance workers, so it is not at all a logical conclusion that they are the next target

[Bluebird]

I don't agree that it's a logical step.

Contractors working through 'mycos' and HMG got along fine (IR35 notwithstanding) for 30+ years until along one day came the cancer of MSCs and a load of contractor wannabies jumped on.

IMHO (and that of lots of others) MSCs have no place in the market, are not needed as a trading vehicle and were only invented because someone saw a way to make a buck selling them.

It was right that that rules were introduced to outlaw them, and there is no reason whatsoever that just because they have been, there should be steps to ban some other way of trading.

tim

The problem being is that a lot of the "johnny come latelys" have now moved from MSC to firms like SJD & NW - if the people the HM are targetting have moved do you really think they'll let them live in peace ?

[Bright Spark]

The problem being is that a lot of the "johnny come latelys" have now moved from MSC to firms like SJD & NW - if the people the HM are targetting have moved do you really think they'll let them live in peace ?

SJD & NW etc provide "accountancy" services for your ltd company, whilst
the MSC's created a structure and contracts to overcome IR35 and avoid tax
that's why the goverment stepped in to stop them

Reading the introduction of this document might shed some further light
http://www.hm-treasury.gov.uk/media/...panies_453.pdf

HTH

[Bluebird]

I agree

"It is a long-standing principle that the tax treatment of income is determined by its nature – that is, income which is properly employment income should be taxed as such.Consistent with this principle the Government seeks to ensure that even if an individual is working through a company, but the underlying nature of the contract is one of employment, tax and national insurance contributions (NICs) should be paid at employed levels."

What I'm saying is that those who a month or two ago were using MSCs to "avoid" being "taxed" at "employed levels" are now using Ltc Companies [ PSCs ] & Accountants such as SJD & NW.

I think it would be foolish to expect HMRC to turn a blind eye to this now - although I would guess a lot would depned on what % of ex-msc clients are now PAYE or Ltd.

If for example SJD had 5,000 UT contractor clients pre April 07, and now had 10,000 then logically HMRC might want to trap SJD into falling under the same legislation as the MSCs - the point I was trying to make is perhaps thats why there is confusion around this and HMRC will 'clarify' once they are confident they can catergorise the big companies [ such as SJD & NW ].

I'm not sayiny they will, and I don't disagree that one interpretation of the legislation at the moment points to the fact that SJD, NW and their clients are ok - but I wonder for how long that will be the case.

If on the other had the majority ot IT contractors used local accountants, then perhaps there would be less motive for HMRC to look closer at SJD & NW and try to catch them with either the existing legislation or something that they come up with in the future.

I truely hope that we have heard the last of this, but my head tells me it's only a matter of time....

[Bright Spark]

I agree
If on the other had the majority ot IT contractors used local accountants, then perhaps there would be less motive for HMRC to look closer at SJD & NW and try to catch them with either the existing legislation or something that they come up with in the future.

I truely hope that we have heard the last of this, but my head tells me it's only a matter of time....

The difference between a local accountant and the likes of SJD and NW is the
same as using a local corner shop or using a Tesco / Sainsbury.

Just because you shop at Sainsbury or Tesco rather than Arkright's doesn't
make you more of a target for investigation. Moreover the goverment
could simply investigate every company registered with companies house which is trading as "IT Consultantcy" or "Sofware Services".
why doesn't it do that?.

MSC's were totally different based on the above analogy they did all
the shopping for you and got the goverment to pay for it as well !!