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Caught in the crosshairs
Key points
- To determine if a limited company is an managed service company (MSC) – and their accountant an MSC provider – HMRC reviews the level of involvement between the two.
- In Christianuyi Limited and others v CRC five contractors received a significant tax bill – with the decision potentially applicable to all clients of the firm leading to millions in tax liability.
- HMRC has increased its MSC compliance activity and possibly plans to capitalise on it.
- Accountancy practices must understand the potential threat posed by MSC legislation and know how to mitigate these risks to protect clients and avoid crippling tax liabilities.
- Accountants should offer support to affected clients.
Last month there was a new and potentially major development regarding the notoriously complex managed service company (MSC) legislation.
HMRC took the view that at least 1 000 limited company contractors breached the MSC rules issuing letters which...
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