Moving MSC/Composite to Ltd

Update to page:

KPMG confirms SJD Accountancy is fully compliant with the MSC legislation.

SJD became the first firm of accountants to be confirmed by KPMG as ‘NOT’ being caught by the Governments Managed Service Company legislation.

Despite what you may have read or been told by some providers - there is no problem what so ever with working through your own limited company.

We have taken our own professional legal advice and are very comfortable that we are not caught by the new legislation.

Composite/MSC providers have been heavily impacted by the new rules and we have heard that these companies are now telling clients that genuine accountants are in the same boat as them, which is patently untrue.

Additionally, we have had discussions with HM Revenue and Customs and have had confirmed from them, in writing (see below), that genuine accountancy firms such as SJD are not impacted in the least by the latest MSC regulations as we:

1. are a firm of accountants carrying on a business of being accountants;

2. offer professional advice as chartered tax advisers and accountants and are regulated by the Chartered Institute of Taxation;

3. offer tailored advice and services to our clients and we are not involved with the running of our clients companies.

Extract taken from the e-mail received by SJD Accountancy from HMRC:

“*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) (this is the piece of legislation that has forced composite/MSC providers to either cease trading or switch to providing umbrella services) and is therefore outside the legislation, even where a sizeable proportion of the client base are service companies (on the whole contractors come under the term of ‘service companies’, SJD is the UK’s largest provider of fixed fee accountancy services to Contractor clients).

* The legislation seeks to distinguish between an accountant in the business of being an accountant, providing accountancy services, and an MSC provider, in the business of being an MSC provider (who may have accountants on the payroll) who provides services beyond those recognised as accountancy services." This simply means accountants such as SJD who are, and have always been, in the business of providing traditional and professionally regulated accountancy services, are totally unaffected by the legislation.”

And from the legislation itself:

"The following are not an MSC Provider by virtue of the activity described:
1. A firm of accountants carrying on a business of being accountants (irrespective of the percentage of the client base which is individuals operating through service companies)

2. A Tax Adviser carrying on the business of being a Tax Adviser generally"

The legislation has been bought in to clamp down on:
1. Composite companies, which set up nothing more than artificial companies with numerous directors, all of whom operate through the same company to avoid IR35 legislation and operate through clever tax loopholes.

2. Also managed service companies - whereby the contractors’ limited company is totally outsourced and managed by a third party, typically the contractor doesn’t even have access to their own business bank account.

All of the above means it is totally safe and proper to operate through your own limited company, despite what certain companies may be telling you.

Click here if you would like to read more about operating through your own limited company: http://www.sjdaccountancy.com/about/ourservices/first_timers.html

SJD Accountancy is the UK's largest specialist contractor, freelancer and SME firm of accountants with offices across the UK. We have over 15,000 clients, all of whom work through their own Ltd Co. SJD is also deemed IPSE Accredited Accountants.

We offer a complete package including completion of accounts*, payroll bureau, dividends, corporation tax computations, personal taxation, free bookkeeping software, access to your own dedicated tax expert and all company returns for a fixed fee of £120 plus VAT per month.

If you have any question about contracting or would like any further advice please call our new client services helpdesk on Freephone 0500 152500 / 01442 275789 or email: jessica@sjdaccountancy.com

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, Limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's Largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant* face to face.
  • Money back service guarantee. All your telephone calls and emails will be answered the same day or we will make a full refund of that months fee.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee of £120 plus VAT per month.

If you have any questions about contracting or would like any further advice please call our new client services helpdesk on 01442 275789 or email: janice@sjdaccountancy.com.

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again.

Form your own Limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

You may also find the following pages, guides and case studies useful:

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.