January 6 2008 was the date when third parties became potentially liable for huge tax bills if they force their contractors into using non-compliant umbrella bodies. This stems from the Managed Service Companies (MSCs) legislation included in the 2007 Finance Act.
Today (Monday January 7), the Recruitment and Employment Confederation is warning recruiters and other third parties (such as the end-users of contractors) to get their house in order if they want to avoid unwanted tax bills.
Commenting on this development, Anne Fairweather, the RECís Head of Public Policy, said: ìThe first thing all recruiters and users of contractors should remember is if they offer no advice to contractors about which umbrella companies they use ñ they cannot be caught by these rules.
ìHowever many contractors look to recruitment agencies for advice about umbrella schemes. Some agencies may therefore choose to guide contractors with a list of preferred suppliers. In these circumstances agencies should carry out due diligence to insure that schemes that they are recommending are compliant with MSC legislation.î
HMRC will be publishing guidance on the issue of debt transfer shortly, including a check list of things to look out for when considering recommending certain umbrella schemes. This will appear on:
Take care in the advice you give contractors, warns recruitment body
January 6 2008 was the date when third parties became potentially liable for huge tax bills if they force their contractors into using non-compliant umbrella bodies
