OrangeGenie's budget reaction

**thunderlizard** · 21 March 2007, 22:20

who are "the service providers...of limited companies"?
the people who take £15 off you for the privilege of sending your companies house forms in I suppose.

**Nemex** · 21 March 2007, 22:32

Originally posted by gingerjedi

Just got this via email if anyone is interested in an unbrella's point of view.

It is now PAYE Umbrella Company or Personal Service Company

Chancellor leaves only two options for Contractors. A rush is now expected from Composite Companies into safe PAYE Umbrella Companies and Personal Service Companies.

Bell Tolls for Composites

So, the Chancellor has finally spoken and the death knell of the Composite Company has been sounded.

There are two winners and one loser.

The big losers are the Managed Service Company providers of Composite Companies and their contractors who are now in schemes that are effectively redundant.

The big winners are the service providers of PAYE Umbrella Companies & of Personal Service Companies (Limited Companies) and the contractors who use them.

Contractors who were lured into those 'tax saving’ schemes are now wondering whether they can (or should) trust the new Personal Service Company schemes that those same vendors are now offering. Evidence in the market points to the MSC providers not only attempting to buy back shares in the original composite at ‘below market value’ valuations but also encouraging contractors to ignore IR35 legislation in order to maintain their take home pay. Of course the penalties associated with incorrectly accounting for IR35 will now fall on the contractor not the MSC provider.

The Winners

Those who are left smiling are the contractors who plumped for the safer PAYE Umbrella Company options originally. The service providers smiling are those who refused to take the riskier routes that some of those Composite Company service providers took in trying to outbid each other in tax savings for contractors – that would eventually lead to their downfall.

It was always on the cards that the Chancellor was going to go for the Composite Companies in the end as sure as night follows day – and today he did just that.

But, you're ok. As a customer of OrangeGenie you don't need to worry because you are FULLY compliant with the law - always have been and always will be, guaranteed. You can carry on as normal knowing you are not affected in any way by the new laws. In fact, because we are an HMRC recognised umbrella company that does everything compliantly and securely, you couldn't be any safer.

I will be studying the legislation in greater detail and will advise you of the relevant points in due course.

Regards

Graham Fisher FCCA, Managing Director

GenieWorldUK

Maybe I have mis-understood but isn't it now the situation that as with most PAYE Umbrellas you were able to claim none taxable expenses for travel, subsist. etc, but now you won't be able to due to the legislation along the lines of "An MSC and or scheme provider that makes payments exceeding what the individual would have received if it had been employment income". So doesn't it it mean in effect the only benefit of using a PAYE umbrella will be that you don't have the work / admin associated with running your own Ltd Co?

**gingerjedi** · 22 March 2007, 09:29

Originally posted by Nemex

Maybe I have mis-understood but isn't it now the situation that as with most PAYE Umbrellas you were able to claim none taxable expenses for travel, subsist. etc, but now you won't be able to due to the legislation along the lines of "An MSC and or scheme provider that makes payments exceeding what the individual would have received if it had been employment income". So doesn't it it mean in effect the only benefit of using a PAYE umbrella will be that you don't have the work / admin associated with running your own Ltd Co?

Yes but funny enough they fail to mention it, talk about putting a brave face on the situation... I give em' a couple of months then they will go down the pan.

OrangeGenie's budget reaction