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

[Burdock]

Has one of my posts been removed? I thought I posted a fairly lengthy post earlier on based on some discussions I had with accountants.

Denny, do you mean here?

http://forums.contractoruk.com/threadnav16369-2-10.html

[Robot]

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

It was a 'scheme' and no doubt all the contractors (or a high proportion of them) where outside IR35 because of the ‘scheme’.

Obviously, file-travel knows this and they have gone for a safe and HMR&C friendly umbrella option, incidentally, Giant have done the same.

The top ten scheme providers are beginning to fall one by one..

[chu]

It was a 'scheme' and no doubt all the contractors (or a high proportion of them) where outside IR35 because of the ‘scheme’.

But they were running ir35 and non-ir35 separately. They were doing questionnaires and sending the contracts out for 3rd party assessment before advising anyone that they were outside the scope of ir35.

Since filetravel were proposing that contractors would have their own completely independent non-filetravel ltds and bank accounts, I don't see where 'scheme' begins and ends by your reckoning. Seems to me they were just proposing to offer the same kind of service as the other contractor acountants. Can you or anyone else tell me precisely the difference between what filetravel were proposing and sjd, nw etc?

[simondolan]

But they were running ir35 and non-ir35 separately. They were doing questionnaires and sending the contracts out for 3rd party assessment before advising anyone that they were outside the scope of ir35.

Since filetravel were proposing that contractors would have their own completely independent non-filetravel ltds and bank accounts, I don't see where 'scheme' begins and ends by your reckoning. Seems to me they were just proposing to offer the same kind of service as the other contractor acountants. Can you or anyone else tell me precisely the difference between what filetravel were proposing and sjd, nw etc?

Filetravel and the others were operating composite companies. When the legislation changed they set up New Cos for each of the previous composite members. This was specifically mentioned in the Budget as being a situation that could be caught and which could have lead to the directors of Filetravel being held personally liable for the debts of each and every one of their clients.

SJD, NW etc never operated composite companies and therefore could not be caught in the same way as which KPMG, Deloittes etc etc could not be caught. We are all accountants - not "Scheme Providers". I'd be very surprised if any composite provider had any qualified accountants working for them - they would not be necessary - they were not running an accountancy practice, they were running a basic payroll service with the addition of dividends - nothing more.

[Robot]

chu


I believe all one person limited companies that provide their personal services are caught under the MSC legislation BUT providing your professional accountant is not ‘an MSC Provider’ then you are safe.

I think you will have to ask File-travel why they pulled out of the market. Although, I think Simon (SJD) has given a good description of why @ post 67.


Robot

[chu]

chu


I believe all one person limited companies that provide their personal services are caught under the MSC legislation BUT providing your professional accountant is not ‘an MSC Provider’ then you are safe.

I think you will have to ask File-travel why they pulled out of the market. Although, I think Simon (SJD) has given a good description of why @ post 67.


Robot

Well that was my original point. In post 67 Simon said that filetravel would still be running the banking (having some control over the company, and hence acting as a MSC) - but this isn't how it was going to work at all. As you and Simon say now, it is the fact that they are providing MSC services to other contractors which seems to be the deciding factor here. I don't know if it's just me being dense but that seems a bit weird (and legally dubious). How is a contractor supposed to control whether his accountant decides to run a brolly as a sideline?

[Robot]

I don't know if it's just me being dense but that seems a bit weird (and legally dubious). How is a contractor supposed to control whether his accountant decides to run a brolly as a sideline?

Good question and IMHO I think the contractors will have to carry out due diligence for themselves or the agencies (due to the transfer of debt provision) will run scared and decide they will only deal with contractors who are operating through (dare I say it) file-travel and giant with their HMR&C approved PAYE friendly umbrella scheme!

[cojak]

Classic FUD.

Go Ltd. Get yourself a good accountant.

End of story.

[Lewis]

Get yourself a good accountant.

Giant have done a new website this weekend. Their latest offering to the debate is ... John Chaplin, Tax Director, of KPMG says: "This is the end for companies specialising in promoting and facilitating tax-advantageous services to one-man limited companies, regardless of whether they are badged as ‘accountants’ or not." ... Clause 24 states: ‘The Term in a "professional capacity" means that professionally qualified persons [accountants] normally would not be considered to be an MSC provider except to the extent that they are in the business of promoting and facilitating the use of companies to provide the services of individuals [one man limited companies]."

So IMHO you need to find a good accountant who doesn't promote and facilitate PSCs (whatever that means exactly!)

[cojak]

I believe Giant is the chief promotor of Fear, Uncertainty and Doubt (FUD) in all of this.

Go back to the HMRC's briefing note issued on 30/03/07 - they are clear.

Go Ltd. Get yourself a good accountant. Job done.

Or:

Get yourself a good accountant. Go Ltd. Job done.

I am not worried by this change. I am a Ltd business. My accountant is a chartered management accountant. I think that Giant is trying to shore up rapidly sliding profits - Giant is not talking to me (or about me). Giant is talking to the contractors who are looking at leaving them.