MSC's Outlawed on APRIL 6th for Self Employed

craigio

Due to new legislation Managed Service Companies for Self Employed people will be outlawed on April the 6th.

I am now left with a choice to do standard PAYE or to run under my own company, what route have people taken? My current umbrella id offering me a choice of what route i need to take.

I am considering to run under my own company, as apparently there is a saving of taking dividends instead of PAYE. Has anyone got bitten by doing this?
I am within IR35, but also i have colleagues who have their own companies.
I am currently with Giant and they are offering me their Trailblazer Service.

Interested in feedback.

http://www.giantgroup.co.uk/press/2006december.asp

WHA

craigio wrote: »

I am currently with Giant and they are offering me their Trailblazer Service.

If you are caught by IR35, then probably best to go under PAYE with the agency or an "umbrella". If you aren't caught by IR35 then definitely get your own limited company, through a proper firm of accountants, which should cost an average of £75 per month for everything. The Giant trailblazer seems to cost around £2000 p.a. all in, which is VERY expensive for exactly the same sort of services provided by contractor specialist accountants.

WHA

Just an update, Giant have withdrawn their trailblazer scheme and now only offer their PAYE umbrella service. Presumably other firms that previously provided the MSCs and who have recently tried to do mass-formations of separate limited companies for which they will continue to manage and operate will do likewise as it is clear from the legislation that they will be targetted.

The only remaining option, other than PAY/umbrella is to have your own limited company and manage it yourself, i.e. be the cheque signatory, raise the invoices, pay the bills, arrange your own insurance, etc - the specialist "proper" firms of accountants that offer "support" services, usually in the form of a "package" under a monthly fee can continue to do so without being affected by the MSC rules. Pick a proper personal service company specialist accountant and you're home and dry and can forget about MSC rule changes.

Despite what the Giant press releases and emails to their current clients intimate, "proper" limited companies owned and operated by their directors/shareholders ARE NOT affected by the MSC rules if their accountants are only "advising" rather than actually undertaking transactions and management.

Petmidget

I had a client forward me Giant's press release earlier today. It is well written but nothing more than "instill panic" marketing, encouraging joining their "only legal" strongbox (i think was product) scheme.

BS in short