On 6th December 2006 the Chancellor announced in his Pre-Budget Report that further measures would be introduced in April 2007
to tackle tax avoidance by Managed Service Companies. The Managed Service Company (MSC) legislation was implemented.
Contractors caught using a Managed Service Company lose the tax advantages of operating via a limited company, and must pay
tax amounting to the same as if they were on the clients payroll. This is equivalent to being caught by IR35.
This section explains the MSC legislation, and provides updates and guidance.
^ TopWhat are Managed Service Companies?
What is a managed service company?
Defines a Managed Service Company in the context of contractors and the PBR.
Managed Service Company (MSC) legislation – key guide for contractors and agencies
Contractors using managed service companies are taxed as employees. Debt transfer rules allow HMRC to ask agencies/clients for contractors’ tax owed.
^ TopAbout the legislation
Proposed changes to managed service companies - explained
Explains the legislative changes introduced in the 2006 Pre-Budget Report
^ TopKey Information for Contractors
Managed service companies - new revenue guidance for contractors
Contractors have a better idea of what the managed service company legislation means for their businesses now that the Revenue has issued guidance about it. But some areas, regarding agencies for example, need more.
Contractors should avoid taint of MSC brush, says lawspeed
Now that the managed service company legislation is in place, contractors should take specific steps to avoid risk.
Contractors should vet providers carefully, says HMRC
At a meeting organised by the PCG, Treasury policy director Robin Wythes told contractors to carefully vet their service providers to ensure that they do not fall under the new managed service company legislation.
Changes in the final MSC draft offer help to contractors
Jonathan Legg of Lawrence Graham explains the importance of the changes made before the final draft of the MSC legislation was established.
Contractors need to know what is a managed service company?
The definition of an MSC is becoming the object of controversy. The Professional Contractors Group sets the record straight.
Contractor tests to see if suppliers are Managed Services Company (MSC) providers
Contractors can avoid MSC rules and non-compliant service providers, says Stuart Davis in his first interview since becoming SPA Chairman.
After the MSC legislation what should contractors do with existing contracts?
In the light of the Managed Service Companies (MSC) legislation in the recent Budget, what options do contractors have open to them with their contracts and what should they do to make sure they are compliant?
^ TopCalculating the cost
Managed Service Company Legislation Calculator
Find out if the legislation affects you, and the resulting decrease in your net income.
^ TopOther relevant information
Limited company or umbrella – deciding on a payment structure
First time contractors have two options for setting up a payment structure: Limited company, or umbrella company. This article discusses the differences between the two and gives practical advice on which option to choose.
Choosing an umbrella services company
This article discusses the many factors to consider when choosing an umbrella company to use.
What is a PAYE umbrella company?
Explains how a PAYE umbrella scheme works.
Choosing a contractor umbrella - checklist download
Download a checklist to help the decision of which umbrella company to choose.
Reasons and practicalities of moving from an umbrella to a limited company
Discusses the reasons and steps to take to move from an umbrella arrangement to a limited company.
Valid expenses as a contractor - what you can claim
We describe in detail what expenses are allowed to be claimed when you are contracting.
What is IR35?
Explains what IR35 is and how it affects contractors.
Financial impact of IR35 on contractors
A contractors take home pay is reduced by up to 25% when caught by IR35.
New managed service company calculator released
Use our brand new calculator to determine if you are caught by the new Managed Service Company Legislation, and what the financial impact on your pocket it likely to be.
^ TopLatest news
Contractors using managed service companies are taxed as employees. Debt transfer rules allow HMRC to ask agencies/clients for contractors’ tax owed.
Last May
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Thu, 19 May 2011
Contractors can avoid MSC rules and non-compliant service providers, says Stuart Davis in his first interview since becoming SPA Chairman.
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Thu, 28 Jan 2010
New guidance issued by HMRC targets offshore and self-employment MSC providers, leaving contractors at risk from debt transfer provisions.
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Fri, 05 Dec 2008
Contractors will be aided by having service providers who can comply with HMRC audit standards. It's about getting good advice.
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Wed, 16 Jan 2008
The plan to audit service providers will mean that new contractors get good advice and avoid traps
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Mon, 29 Oct 2007
Contractors who have their own limited companies already set up before they contact recruitment agencies will not expose the agencies to any risk in terms of tax debt transfer.
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Tue, 16 Oct 2007
The Revenue expects to provide guidelines that will lead to the creation of an audit scheme for contractor service providers. Which means that you will once again be able to ask your agent about who should do your taxes.
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Sat, 13 Oct 2007
An audit scheme for contractor service providers that would declare them free of the taint of managed service company status could help the entire industry, Barry Roback of JSA says.
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Fri, 05 Oct 2007
HMRC is mooting schemes to accredit or audit service providers to contractor companies to ensure that they are not managed service companies. But there is no commitment to such a scheme, and consideration is just starting.
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Mon, 24 Sep 2007
As JSA's Barry Roback points out, contractors need reliable advice and can't get it from their agencies now that the managed service company legislation has kicked in. Accrediting service providers would offer a solution.
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Fri, 14 Sep 2007
Now that the managed service company legislation is in place, contractors should take specific steps to avoid risk.
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Thu, 02 Aug 2007
Jonathan Legg of Lawrence Graham explains the importance of the changes made before the final draft of the MSC legislation was established.
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Thu, 19 Jul 2007
Contractors have a better idea of what the managed service company legislation means for their businesses now that the Revenue has issued guidance about it. But some areas, regarding agencies for example, need more.
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Wed, 18 Jul 2007
At a meeting organised by the PCG, Treasury policy director Robin Wythes told contractors to carefully vet their service providers to ensure that they do not fall under the new managed service company legislation.
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Thu, 21 Jun 2007
A survey of contractors by JSA shows that a vast majority resent the attack by the Treasury on managed service companies, and, indeed, feel unjustly singled out by it.
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Mon, 11 Jun 2007
Financial Secretary to the Treasury John Healey explained the intentions of managed service company in a House of Commons Committee Debate.
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Wed, 23 May 2007
The contractor-specialised accounting group JSA shows definitively that it does not run managed service companies.
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Thu, 10 May 2007
In an exclusive interview with ContractorCalculator, the Honourable Theresa Villiers, Conservative MP for Chipping Barnet, tells us that there is hope for some improvement on the MSC attack by the Treasury
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Wed, 02 May 2007
On April 30, Conservative MP Theresa Villiers attacked the new MSC legislation in a parliamentarty debate, calling it ''unreasonable new administrative burdens...that affect the UK's ability to compete in a global market.''
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Tue, 01 May 2007
The new legislation that penalises managed service companies will definitely affect the relationship between recruiters, agencies, and contractors. Here's what you should know.
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Fri, 27 Apr 2007
The definition of an MSC is becoming the object of controversy. The Professional Contractors Group sets the record straight.
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Thu, 26 Apr 2007
Are scheme providers clear about the new Managed Services Company (MSC) legislation and what it means for their customers?
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Tue, 10 Apr 2007
In the light of the Managed Service Companies (MSC) legislation in the recent Budget, what options do contractors have open to them with their contracts and what should they do to make sure they are compliant?
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Thu, 05 Apr 2007
The Lawspeed Seminar on MSCs held on April 3 showed us that there's not much certainty on what to do under the new legislation.
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Wed, 04 Apr 2007
A survey by ContractorCalculator shows that far too few contractors are prepared to make the changes they need to make before managed service company legislation goes into effect on April 6.
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Fri, 30 Mar 2007
The Treasury today replied to questions from ContractorCalculator about managed service companies.
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Tue, 27 Mar 2007
Comment on the text of the new MSC attack from the Treasury suggested that much case law willl be needed to handle unresolved issues.
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Mon, 26 Mar 2007
ContractorCalculator offers an exclusive: the text of the law in the budget that will change the way you do business: managed service companies.
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Thu, 22 Mar 2007
Contractors hit by Managed Service Company legislation, but consultation forces Government to amend its approach.
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Wed, 21 Mar 2007
Chancellor Gordon Brown announced no major changes to legislation penalising managed service companies in his budget speech today.
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Wed, 21 Mar 2007
UK Contractors await an attack on their industry in the budget announcement on Wednesday 21st March. Billions of pounds are at stake due to the attack on managed service companies.
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Mon, 19 Mar 2007
Today we launch an independent Budget Effects Survey designed to shed light on the level of understanding that exists of the new legislation amongst Contractors.
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Fri, 16 Mar 2007
Use our brand new calculator to determine if you are caught by the new Managed Service Company Legislation, and what the financial impact on your pocket it likely to be.
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Fri, 16 Mar 2007
According to the company formations specialist Duport, the number of limited company starts has dramatically increased since the Treasury began its attack on managed service companies.
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Fri, 16 Mar 2007
According to JSA's Barry Roback, it is urgent for the government to establish in law a clear difference between contract service providers and employees.
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Thu, 15 Mar 2007
The Institute of Chartered Accountants of Scotland finds that the Treasurys proposal for managed service companies lacks focus; others find it obscure.
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Wed, 14 Mar 2007
Industry sources now say that a compromise is possible on managed service companies, as we reported here last month.
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Tue, 13 Mar 2007
The Government says it wants a more flexible workforce, so why is it attacking contractors?
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Fri, 02 Mar 2007
An industry shakeup could follow the Treasurys publication of new rules that make third parties like recruiters and agenices liable for tax debts of managed service companies and composites.
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Tue, 27 Feb 2007
No decision yet from the Treasury on managed service companies, and changes could be made; Lawspeed plans a seminar for open discussion of the issues with the Revenue
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Thu, 22 Feb 2007
Contractors in managed service or composite companies need to make changes to cope with HM Treasury’s attacks on them. Here’s what contractors should do.
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Tue, 06 Feb 2007
The attacks by The Treasury on ‘managed service’ and ‘personal service’ companies will fail, because contractors who use them are just like other owners of small companies.
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Tue, 30 Jan 2007
Plans to crack down on managed service companies could change, as difficulties in enforcement have already become apparent in the consultation stage.
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Thu, 18 Jan 2007
View from Barry Roback, Chief Executive of JSA Accountants.
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Fri, 12 Jan 2007
Barry Roback, from JSA Group, comments on the proposed legislation to tackle managed service companies.
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Tue, 19 Dec 2006
Market reaction from key industry players to proposed legislation to tackle managed service companies.
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Mon, 11 Dec 2006
PCG Comments on the Proposals to Tackle Managed Service Companies
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Thu, 07 Dec 2006
Leading provider comments on Pre-Budget statement regarding proposed treatment of Managed Service Companies.
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Thu, 07 Dec 2006
Defines a Managed Service Company in the context of contractors and the PBR.
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Thu, 07 Dec 2006
Explains the legislative changes introduced in the 2006 Pre-Budget Report
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Thu, 07 Dec 2006
^ Top