HMRC guidlines on ex MSC's

[Dark Black]

Exactly... I use the services of a well known (on here) accountant based in Lancashire (and I'm very happy with them) but am concerned that as the bulk of their biz seems to be with contractors that they "may" now fail the test...

Still, it's all a game at the end of the day really....

[Nixon Williams]

Exactly... I use the services of a well known (on here) accountant based in Lancashire (and I'm very happy with them) but am concerned that as the bulk of their biz seems to be with contractors that they "may" now fail the test...

Still, it's all a game at the end of the day really....

I guess this is refering to us!

We operate as accountants who happen to have a large number of contractor clients. The list of indicators published by HMRC, No.6 is the only one that could apply to us and in any case the last sentence shows that they are targeting points 2, 3, 4 & 5 and even then these MAY indicate that they are an MSC provider.

We are confident about our future as accountants. Remember we have never offered a MSC/composite option or even an umbrella service.

Alan

[Bigbird]

Well I was quite relieved at what I was reading until I got to one very small line.

I offer a Company Secretary service to my clients (In fact I'm thinking of applying for membership of the ICSA) and am currently Co Sec to 10 companies, 3 of which are ex-MSC contractors. I charge an annual fee for this service which is independent of any fees charged for work done (I only charge for work done, no fixed fees, but I do estimate what the annual total is likely to be prior to any signing of contracts).

These new guidelines put me firmly in the ballpark of being "involved" with my 3 contractors on that one circumstance alone putting them at risk and also labelling me as a potential MSC provider. Seems a bit daft when before too much longer the Companies Act will have done away with the need for a company sec in the first place!

Every other box can be checked as putting me outside the definitions of an MSC provider, for someone operating on my scale the loss of that little bit of extra income, whilst not significant, is bloody irksome!

[Lewis]

These new guidelines put me firmly in the ballpark of being "involved" with my 3 contractors on that one circumstance alone putting them at risk and also labelling me as a potential MSC provider.

You're going to be more knowledgeable that me not doubt being an accountant but I think you only need worry about being "involved" if you could be classified as an MSC provider in the first place. I suspect a lot of popular accountants would be "involved" (hence my previous post) but that in itself doesn't seem to be a problem unless you carry on the business of promoting or facilitating service companies. I am just wondering if HMRC will try and pin this on some firms and in which case being "involved" is then an issue.

[THEPUMA]

You're going to be more knowledgeable that me not doubt being an accountant but I think you only need worry about being "involved" if you could be classified as an MSC provider in the first place. I suspect a lot of popular accountants would be "involved" (hence my previous post) but that in itself doesn't seem to be a problem unless you carry on the business of promoting or facilitating service companies. I am just wondering if HMRC will try and pin this on some firms and in which case being "involved" is then an issue.

But the guidance says that the following are an MSC Provider:-

"...

A firm of accountants carrying on a discernable part of their business specifically to market and/or provide corporate solutions and services to individuals providing their services to end clients.

..."

which by my reading makes everyone an MSCP so the only way out is to not be involved.

However, it also says that "A firm of accountants carrying on a business of being accountants (irrespective of the percentage if the client base which is individuals operating through service companies" is not an MSC Provider.

What is the crucial difference between those two descriptions because I'm buggered if I can see one?

[Bradley]

Marketing

But the guidance says that the following are an MSC Provider:-

"...

A firm of accountants carrying on a discernable part of their business specifically to market and/or provide corporate solutions and services to individuals providing their services to end clients.

..."

which by my reading makes everyone an MSCP so the only way out is to not be involved.

However, it also says that "A firm of accountants carrying on a business of being accountants (irrespective of the percentage if the client base which is individuals operating through service companies" is not an MSC Provider.

What is the crucial difference between those two descriptions because I'm buggered if I can see one?

I think that the difference is that the former market the concept of one-man limited companies as a solution irrespective of personal circumstances.

I think that accountants that charge fees on a monthly basis could be caught e.g. £100 per month for the first 12 months and then monthly thereafter, because that is linking their fees to the economic activity of the company.

[Ardesco]

IMHO it is purposfully vague and encompasses as many people as possible so that when they have finished battering MSC's they can then start looking at regular accountancy firms if they decide they want an easy way to collect more revenue.


Like everthing with this government they don't like to make it clear because if it is clear they can not change thier mind and pursue further avenues of income at a later date.

[Ardesco]

I think that accountants that charge fees on a monthly basis could be caught e.g. £100 per month for the first 12 months and then monthly thereafter, because that is linking their fees to the economic activity of the company.

That's no different to charging £1200 a year and the yearly thereafter. You could still argue that the charges are linked to economic activity (Which they invariably are, you would not expect a company that is not trading to continue to pay accountants fees indefinetly).

[JKnz]

I think that accountants that charge fees on a monthly basis could be caught e.g. £100 per month for the first 12 months and then monthly thereafter, because that is linking their fees to the economic activity of the company.

I wouldnt class that as being linked to economic activity. If the accountancy fees were charged at say a set % of cash inflows or outflows of the company that would be linked to the economic activity but a monthly set fee (which is really just an annual fee pro-rata'ed) is not.

[Lewis]

I think that accountants that charge fees on a monthly basis could be caught e.g. £100 per month for the first 12 months and then monthly thereafter, because that is linking their fees to the economic activity of the company.

I read it to mean that you can't only pay the provider fees when you are in work (e.g. Giant only charged an admin fee for weeks you worked) - "first activity" pg 11. I am assuming that paying an accountant a monthly fee even when out of contract is fine. But that's just my interpretation of the language.