Managed Service Companies - What's it about?

7th March 2007

Now that the consultation period (March 2nd) is over we can get a clearer picture of how things will be after April 5th. We thought that you would appreciate a brief update on what progress BITE has made.

We still do not know what the final legislation will look like, but the consensus appears to be that Umbrella companies will NOT be included within the final legislation. However Composite Companies (multi share SPC classes) and Managed Service Companies will effectively cease to operate after the 6th April.

The recently released addendum to the proposed legislation covers the transfer of debt to 3rd parties (including potentially agencies and end user clients) from Managed Service Companies who fail to pay their taxes. It is certain that if your contractor uses a Personal Service Company and it can be demonstrated that the PSC is not "Managed", then the proposed legislation will not apply. BITE is not a Managed Service Company. BITE is working to ensure that every contractor working with every agent and client is compliant with the new legislation, and understands fully the implications of their contract and IR35.

The budget is on the 21st of March 2007 and the full picture will emerge following this.

We hope that you appreciate the magnitude of the task we face over the next 4 weeks and the lengths that we are going to ensure that you will be fully compliant.

If you have any questions regarding the transition please call our offices on 0870 907 0880.

Regards

Keith Boatman
Director
BITE Consulting