Experts to explain MSC laws
Complex new tax rules for users of Managed Service Companies will tomorrow be explained in plain English in a breakfast seminar run by The Professional Contractors Group.
Small businesses, their advisors and freelance workers who attend the free London-based event can pose questions and queries about the new legislation to a host of industry experts.
Officials from HM Revenue & Customs will join the chartered accountant Berg Kaprow Lewis to offer tips for compliance, while marketplace guidance will be issued by the PCG.
A PCG spokesman said: "We're very pleased with the response rate [from contractors] - we still have a few places, but are expecting a good turnout tomorrow.
He added: "We have had a constructive relationship with HMRC and the Treasury throughout the development of the MSC proposals, and we're pleased that HMRC were therefore happy to provide a speaker, who will be one of the most senior officials to have worked on the MSC rules."
The seminar comes after the majority of contractors polled by accountant JSA said they don't understand new rules for MSCs, which were announced in March and took effect on April 6, 2007.
Primarily, the legislation strips away the tax advantage contractors previously enjoyed by operating through a MSC, by imposing PAYE and National Insurance Contributions.
As a result, most contractors now supply their services through their own limited company, while others, such as those on short contracts, have opted to use a PAYE Umbrella company.
In May, the government said that these two commercial structures are well beyond the scope of the legislation, meaning umbrella and limited company contractors should be exempt.
It said: "Freelancers or agency workers who are engaged directly by any agency or who are in some way in business on their own account and run their own affairs, either through a personal service company or some sort of umbrella company, are simply not affected by the legislation."
Organisers of tomorrow's seminar said that despite the reassurance from John Healy, financial secretary to The Treasury, it is clear that "some confusion over the [MSC] legislation remains."
They added: "PCG hopes that its breakfast meeting,will help to address these uncertainties."
The group has also issued a 'need to know' guide on the MSC legislation, clearly spelling out its implications for agencies, client companies, accountants and contractors alike.