MSC: Further clarity for the recruitment industry

by The Editor at 01:25 18/10/07 (Political News)

The Treasury has said that it is working closely with the recruitment industry to provide clarity regarding the Managed Serviced Companies (MSC) legislation. On a note on its website, HMRC says that its officials have recently spoken at seminars organised by ATSCo and Lawspeed during which two important issues were clarified.

The further guidance points out that: MSC Audit Standard There are no plans for HMRC to provide an accreditation scheme for Service Providers. However, HMRC is actively considering the development of an Audit Standard. Such a Standard would be published on HMRC’s internet and would enable a suitably qualified person, not associated with the Service Provider, to review a Service Provider’s business model using the Audit Standard. This would determine whether the Service Provider’s client companies were MSCs or not. If such a review concluded that the companies were not MSCs, the Service Provider would be able to state that publicly. The intention is that such an Audit Standard would provide legal certainty for Employment Businesses. Officials emphasised that development proposals are at an early stage and there are a number of issues to resolve before a final decision is made. Workseekers providing their services through companies Provided that the Employment Business has not, since April 6, 2007, been directly or indirectly involved in the workseeker obtaining the company, then the Employment Business will not be liable for any PAYE or National Insurance debt under the transfer of debt provision should it subsequently transpire that the workseeker’s company is a Managed Service Company. In practice this situation is most likely to occur where a workseeker who already provides their services through a company approaches an Employment Business. Advertisement Where the Employment Business has, since 6 April 2007, been directly or indirectly involved in the workseeker obtaining the company, for example by virtue of referral of the workseeker to a Service Provider (a Preferred Supplier), then the Employment Business might potentially be liable for any PAYE or National Insurance debt under the transfer of debt provision. Current guidance will be updated shortly. HMRC also proposes to publish further guidance in November to help Employment Businesses mitigate their risk where they use Preferred Supplier Lists. Further information Shout99 has followed the MSC proposals in detail. For further information see the Political News section. -- If you wish to comment on this article, please log in and use the Reply button below. Registering is simple and easy to do online - see 'Join Shout99'. -- The Editor

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