Are We Compliant?

You will by now be fully aware of the new MSC Legislation that has come into force.

If you are currently with a Composite Company, or a Managed Personal Service Company, then you should be re-considering your options, maybe you already have.

Why? Well let’s keep it simple.

Composite Company Explained.

A Composite Company operates like this; it administers a large number of individuals under one Limited Company. The individual will be allocated a particular class of share in the Company, but will not be involved in the administration or running of the Company, will usually not be a director, and will not have any direct access to the Company bank account. The payment run will be either weekly or monthly in the form of a small salary and large dividend and expense payments.

What does the new legislation mean?

New legislation means that individuals using either a Composite or Managed Company will no longer be able to receive either dividends or expenses. What this means in effect is that you will take a very large cut in take home pay.

Should HM Revenue & Customs investigate your composite scheme and one or more contractors in your scheme is found to be inside IR35 all the other shareholders are liable for the additional tax due, plus any penalties, HM Revenue & Customs deems fit to impose.MB5 have always strongly advised against the use of Composite Companies, we have recognised for long enough that this type of payment vehicle makes them a prime target for the Inland Revenue and the Contractors that use them.

What is a Managed Company?

A Managed Company is very much the same as a Composite Company but as apposed to there being several individuals using the same Company, the Managed Company will just have the one individual running through it.

If you have any concerns regarding these types of schemes please contact MB5 for a no obligation discussion.

Moneybox5

As an Umbrella Company we operate neither of these schemes and remain fully compliant with the new legislation.

Still not sure? Well ok, once you have viewed our website please use our useful links page and visit www.hmrc.gov.uk. We really do have nothing to hide.

Make sure you visit our expense claim page!!!!!

By claiming all of your appropriate allowances and exemptions you can minimise your tax bill; however, please understand this is not a way of avoiding tax.

The Revenue & Customs rule for claiming expenses is "that an employee may deduct expenses necessarily incurred in the performance of their duties".