Contract Clause - Section 61B of the Income Tax Act

[Wary]

Managed service company legislation came out a few years ago - Limited companies were set up and then entirely managed by intermediaries who paid those who signed up with them via dividends i.e. as if they were outside IR35. HMR&C outlawed the practise and attached debt transfer so agencies could be done if they recommended these companies to contractors. No effect on IR35 status

HTH

Thanks Lisa.

[LisaContractorUmbrella]

Managed service company legislation came out a few years ago - Limited companies were set up and then entirely managed by intermediaries who paid those who signed up with them via dividends i.e. as if they were outside IR35. HMR&C outlawed the practise and attached debt transfer so agencies could be done if they recommended these companies to contractors. No effect on IR35 status

HTH

[Wary]

I've just received a contract with the clause "The Company represents and warrants that it is not and shall not at any time be treated as a managed service company within the meaning of Section 61B of the Income Tax (Earnings and Pensions) Act 2003."

I've done some research including checking the criteria specified within Section 61B, and not being very astute on such matters, I'm totally confused.

Questions are:
1) What is the purpose behind the inclusion of such a clause?
2) Will it impact my IR35 status, either positively or negatively?

Thanks