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

[malvolio]

Totally irrelevant. The objective is not to catch the MSCs, who were merely providing a service to a market, but the "contractors" who expected company benefits with none of the associated risks and by doing so put the rest of the contractor community at risk from the wrath of Gordon. Any further attack will be at small companies, not their professional advisors, and will almost certainly be aimed at bringing the company taxation regime level with that of a full time employee.

[Bluebird]

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 !!

yes, but the reason they got caught was that MSCs all did the same thing.

The likes of SJD & NW offer over services with IT Contractors in mind which local accountants do not.

I agree that a route to get at all IT contractors would be to investigate all IT Consultants or It Services, however surely it would be cheaper to get SJD & NW to make all their existing clients PAYE using legislation rather than have hundreds of thosands of individual cases ?

[Lewis]

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

What I don't understand is that I used giant many years ago as 'accountants' and they provided exactly the same service as SJD, NW etc. i.e. they setup a company for me, I paid them a fixed monthly fee, they gave me a spreadsheet where I entered all my expenses, bank details etc.. I controlled my bank account blahh blahh.

Even though I moved from Giant I think that 'accounting' service still existed pre 6th April (can anyone confirm that?). I understand their new Trailblazer product was going to have some kind of bank account access which is a big no no but why didn't they just revert to their previous offering, they had all the spreadsheets etc.. they must be losing 1000s of clients this week. I am sceptical it was just because they didn't have the staff etc..

I still have my old spreadsheet, they must too. Not much is needed immediately except payroll which is easy, they could recruit. it doesn't stack up. Even if they dumped the bank account/portal idea they could still offer "accounting" services.

[Bright Spark]

Giant took big risks and invested it's energy in trialblazer
because it wanted to differentiate itself in the market
the margin in providing just accountancy services once you
take out all the costs is fairly low and there are more competitors
who can replicate the same service at lower costs ie NW and SJD.

They just took the view rather than working at the low end accountancy
lets create something new and be millionaires this time next year.......

[Lewis]

Giant took big risks and invested it's energy in trialblazer
because it wanted to differentiate itself in the market
the margin in providing just accountancy services once you
take out all the costs is fairly low and there are more competitors
who can replicate the same service at lower costs ie NW and SJD.

They just took the view rather than working at the low end accountancy
lets create something new and be millionaires this time next year.......

I follow your thinking, but surely a low margin is better than none (from those who have left). And why the accountancy-badge-wont-help press release? Ok it might scare some people into Strongbox, but surely only for a few weeks or months, they won't stay long once they find out all their mates are business as usual via Ltds. It's so frustrating; we need a man on the inside to get to the truth.

What scares me most is the sentence - "promoting and facilitating the use of companies to provide the services of individuals". It's so vague, my gut instinct says if an "accountant" shows figures on the web which show you can earn most by being a Ltd company and then says things like "we can make it easy for you" surely "promoting and facilitating" is exactly what they are doing.

[Denny]

What scares me most is the sentence - "promoting and facilitating the use of companies to provide the services of individuals". It's so vague, my gut instinct says if an "accountant" shows figures on the web which show you can earn most by being a Ltd company and then says things like "we can make it easy for you" surely "promoting and facilitating" is exactly what they are doing.

Isn't that exactly what the EBs are doing when they force freelancers into operating either through a limited company or through a brolly instead of allowing them to be sole traders?

[simondolan]

I follow your thinking, but surely a low margin is better than none (from those who have left). And why the accountancy-badge-wont-help press release? Ok it might scare some people into Strongbox, but surely only for a few weeks or months, they won't stay long once they find out all their mates are business as usual via Ltds. It's so frustrating; we need a man on the inside to get to the truth.
.

Its fairly straightforward. The Pre Budget report said that MSC's would be closed in the Budget.

All the MSC providers (Giant, Filetravel, Brooksons etc) then said, OK, we'll set up all our clients with their own Ltd Company, but still work the Ltd in the same way as the old Managed, ie control of bank account etc.

The actual Budget when the legislation was finally announced said that MSC providers who just set up New Ltd Cos for each client whilst retaning the same control would be caught. So, Giant et al got caught out. Now, why have they pulled the plug? Simple - from next Jan the directors of the old MSC's could be held liable for all the contractors tax debts - wiping out the personal wealth and assets of the directors Giant, Filetravel etc. It is not that they have missed out on potential profits - what they are doing is protecting what they already have.

When you realise the above you can see that the likes of SJD, NW and so on who are outside of this new legislation are 100% sure that it doesn't apply to them.

[chu]

Its fairly straightforward. The Pre Budget report said that MSC's would be closed in the Budget.

All the MSC providers (Giant, Filetravel, Brooksons etc) then said, OK, we'll set up all our clients with their own Ltd Company, but still work the Ltd in the same way as the old Managed, ie control of bank account etc.

The actual Budget when the legislation was finally announced said that MSC providers who just set up New Ltd Cos for each client whilst retaning the same control would be caught. So, Giant et al got caught out. Now, why have they pulled the plug? Simple - from next Jan the directors of the old MSC's could be held liable for all the contractors tax debts - wiping out the personal wealth and assets of the directors Giant, Filetravel etc. It is not that they have missed out on potential profits - what they are doing is protecting what they already have.

When you realise the above you can see that the likes of SJD, NW and so on who are outside of this new legislation are 100% sure that it doesn't apply to them.

That's not what filetravel were trying to do at all for contractors outside ir35. They were setting up ltd. co's and offering to set up bank accounts at cater allen that they would have no control over. Payments would be made direct from the agency to the contractor's business bank a/c. Filetravel would just offer accounting, advising the contractor how much to send to the IR and how much to pay themselves etc.

What they are saying they have just discovered is that because they also happen to operate an umbrella to other contractors means that the PSC's fall within a new definition of an MSC (which sounds rather odd to me). If that is the real reason and their advice from the treasury is sound, that would mean that your accountant's other activities are the deciding factor here. God knows how that would stand up in court as surely a contractor has no control over the other business of his accountant.

[Lewis]

Never heard of filetravel before but just read the notice on their site (www.filetravel.co.uk - click on agency update). It says...

"In summary, contractors opting to set up their own limited company and take financial control and management of their business will remain unaffected by these proposals to regulate MSC’s."

[chu]

"In summary, contractors opting to set up their own limited company and take financial control and management of their business will remain unaffected by these proposals to regulate MSC’s."

Which raises the question of why they have suddenly dropped all their contractors who are outside ir35 from one day to the next.