Managed Service Companies ( Umbrella )

[stantheman]

Hi ,
when I started contracting I chose the option of using an umbrella company, it seemed simple and to be honest I was being a bit lazy. I got the name of a company from the PCG recomended companies page, got a quote and signed up with them.This has been working fine but I have now decided to change to a Ltd company .

I recently came across some articles on contracting websites that lead me to believe that the company I used was a type of 'Managed Service Company', which Inland Revenue are starting to target for tax avoidance. I was wondering if anyone has been hit by this and should i be expecting a tax bill for the last years work ? Is this going to cause me problems with my new Ltd company or if i go back permie ? I am going to speak to my accountant about this as well but I wondered if anyone here had any experiences to speak of.

[pmeswani]

Hi ,
when I started contracting I chose the option of using an umbrella company, it seemed simple and to be honest I was being a bit lazy. I got the name of a company from the PCG recomended companies page, got a quote and signed up with them.This has been working fine but I have now decided to change to a Ltd company .

I recently came across some articles on contracting websites that lead me to believe that the company I used was a type of 'Managed Service Company', which Inland Revenue are starting to target for tax avoidance. I was wondering if anyone has been hit by this and should i be expecting a tax bill for the last years work ? Is this going to cause me problems with my new Ltd company or if i go back permie ? I am going to speak to my accountant about this as well but I wondered if anyone here had any experiences to speak of.

If you are going to speak to your accountant about this, then why ask us for advice?

If you are using an Umbrella company as your employer, then you should be in no danger of being caught under the MSC legislation, unless you participated in an EBT scheme.

[Alan @ BroomeAffinity]

[QUOTE=pmeswani;687678]If you are going to speak to your accountant about this, then why ask us for advice?QUOTE]

Ease up Tiger, that's what often happens here.

But he's right - if yuo've been brolly then you should be OK. But make sure yuo are brolly and not in an MSC scheme that looks like a broly as there are many of these still around.

[pmeswani]

Ease up Tiger, that's what often happens here.

Sorry about that. Bed + wrong side = me.

[stantheman]

I believe I am in an EBT scheme and after digging around a bit i think i am in for a world of pain with this. I took the company from the PCG website so I thought it would be ok ( naive ), I suppose if its sounds too good to be true.....

[Alan @ BroomeAffinity]

I believe I am in an EBT scheme and after digging around a bit i think i am in for a world of pain with this. ...

You could very well be. Get some professional advice quickly. The fact that yuo don't know whether you are in an EBT scheme or and MSC is worrying in itself and I think you should be more informed about how you manage your affairs.

Also, you say you are going to speak to your accountant. If the accountant is the EBT scheme provider bear in mind he might not give you the most balanced advice available.