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HMRC MSC Compliance
MSC Enforcement Activity Yields 6m

Professional Passport has today [17/11/2011] learned that HMRC compliance activity specifically relating to the enforcement of The Managed Service Company Legislation has now raised close to £6,000,000.


HMRC Raise 6m from MSC Legislation

Following the introduction of The Managed Service Company Legislation in 2007 [Chapter9, Part2, Income Tax (Earnings and Pensions) Act 2003 to give it its full title] there has been little evidence to suggest any compliance activity. Most stories predict issues and are based on little more than hear say or gossip.

Professional Passport made a request to HMRC and now understands understands that HMRC have considered the business model of 40 service company providers to determine whether they are Managed Service Company Providers, as defined in the MSC legislation.

These provider reviews have resulted in 216 formal reviews of companies considered by HMRC to be Managed Service Companies.

The figures also reveal that compliance activity in this area is increasing at a sharp rate with the following reviews carried out in each tax year:

  • 2007 / 2008  -  1
  • 2008 / 2009  -  47
  • 2009 / 2010  -  62
  • 2010 / 2011  -  106

These reviews have yielded almost £6,000,000 of additional tax revenues:

  • 2007 / 2008  -  Nil
  • 2008 / 2009  -  £2,468,000
  • 2009 / 2010  -  £2,070,006
  • 2010 / 2011  -  £1,375,000

Commenting on the figures Crawford Temple of Professional Passport stated; "Every provider claims to be compliant, what we know, and have known for many years, is that this simply is not the case - these figures now support our beliefs and claims."

He went on to say; "Professional Passport has, since 2007, been independently assessing provider compliance to allow contractors, recruitment companies and end clients to rely on these detailed checks. We have become the recognised leader in the market with hundreds of recruitment companies relying on our approved providers to make up their preferred supplier lists."

The figures also show that 142 formal transfer of debt notices have been issued since the implementation of the MSC Legislation; all of these being issued in 2010/2011.

The average amount of MSC debt transferred per Notice was:

  • Worker / Shareholder  -  £2,610
  • Other parties  -  £46,975

Recruitment companies and end clients that are concerned about MSC debt transfer can rely on Professional Passport Approved providers and members also benefit from a £5,000,000 per claim debt transfer insurance.

Please feel free to contact us if you require any further information.

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