Giant scaremongering again?

[newbie123456789]

Hi all I just got this email from Giant, I know there was a similar thread a while a go but can't find it now:

When giant announced it was withdrawing from providing limited company (PSC)
services a number of our competitors told us and their contractors that we were
'scaremongering' and that having an 'accountants badge' protected them and their
contractors. HMRC now say that this is not so.

The HMRC website says "..a number of providers are telling their clients that
they (the providers) are not MSC providers, rather that they are accountants.
They are therefore telling clients that their companies are not caught by the
legislation."

The HMRC website goes on to say "..it is HMRC's view that many of these
organisations are MSC providers as defined in the new legislation.."

And HMRC end by saying "If a service company is within the legislation and the
company fails to operate PAYE, this could result in individuals being held
personally liable for the PAYE debts of the company."

This means that a contractor with a limited company supported by a service
provider who, in an attempt to get round the legislation, is badged as an
'accountant', will at some point be personally liable for the tax saved in
dividends and expenses - this amounts to an average of £10,000 pa + interest.
HMRC are making it very clear that they will target the service providers badged
as 'accountants' first and all their contractors.

Finally, some banks are also pulling out or reconsidering the provision of
banking services to limited companies who are supported by these 'accountants'
for fear of being involved in the negative publicity and being accused of
beneficiaries in the structure. As a result, many contractors are not being paid
or are being paid PAYE.

The personal risk for contractors is therefore enormous which is why giant's
advice remains that the only safe way to contract is via an umbrella company.

Is there any truth in what they are saying or are they just scaremongering again?

[malvolio]

No, it's total bollocks. Ignore them.

[Robot]

“a number of providers are telling their clients that
they (the providers) are not MSC providers, rather that they are accountants.

They are therefore telling clients that their companies are not caught by the legislation."


Giant was a scheme provider and they tried to get round the legislation after the 6th December announcement. HMR&C put a block on this in the final draft when it became apparent that the 'scheme providers' wanted to ‘change’ the structure but remained in control and still promoted their services to contractors who were not in business in their own right.

HMR&C always said there were ten Companies they were after, these 10 were very big because of the tie up with recruitment agencies, and the way they promoted their services. The Service Providers were not Chartered Accountants or associated with any particular professional body and this is why HMR&C put in the get out clause for Accountants with a professional Badge!

[Chugnut]

Paragons of virtue, it's not like they have a vested interest at all, is it?

Since any true accountancy firm (in other words, who have never offered a Managed Limited Company service - I'm re-iterating the words deliberately) would have their own position seriously affected by being labelled a provider; you can expect their lawyers to be all over this. "Influences or controls" are the terms used when defining an MSC Provider, hugely ambiguous and highly defensible.

I chose an IT-contractor specialised accountant because the non-specialised one I had before was rubbish, and cost me money therefore "influencing the company finances" in a negative way! Are they an MSC Provider then?

Remember, clarity is the last thing Hector wants. I am convinced pure accountants are exempt, as I'm sure Nixon, Upton, and SJD are as well. And before anyone says "yeah but Hector will come after you first", sure he will, but if he has no joy there, the MSC Provider is next in line. They have a lot more money at stake than each of us does, do you think they'd take the risk if they weren't sure.

[simondolan]

Not a grain of truth.

Just Giant trying to misinform contractors.

Accountants are not caught by the MSC legislation.

Companies who were MSC's are caught.

The reason for the Revenue saying that being a qualified accountant was not enough was because the MSC providers were looking at that as a get out clause to circumvent the rules.

Direct from the Revenue:

"The legislation seeks to distinguish between an accountant in the business of being an accountant, providing accountancy services, and an MSC provider, in the buiness of being an MSC provider (who may have accountants on the payroll) who provides services beyond those recognised as accountancy services."

"An accountant running an accountancy practice, providing services recognised by the accountancy regulatory bodies, would not fulfil the dual criteria in section 61B(1)(d) and is therefore outside the legislation, even where a sizeable proportion of the client base are service companies."

[lilfreckles]

Here we go....

Giant are one of these companies that became big in the industry via composite services, saying that they help you take more money in your pocket home.

Yes they did! BUT IT BACKFIRED ON THEM!!!

Thats all tehy had and now they are loosing quality of service and interest by having to withdraw their product as it didnt comply, but also their one in place (umbrella type) HMRC also has taken their dispensation away as they were trying to play with it.

[Lewis]

there were ten Companies

Do you have names?