Spotlight on managed service companies

HMRC has published spotlight 32 after its success before the First-tier Tax Tribunal in Christianuyi Ltd and others (TC5045).

In that case HMRC argued that the managed service companies (MSC) legislation (ITEPA 2003 s 61A to s 61J) applied to arrangements established and run by a third party.

HMRC continues to open enquiries into similar arrangements that include the provision of workers in various sectors including road haulage health care and education. It says it will investigate and challenge them using every route open to it including litigation and seek full settlement of the tax due plus interest and penalties.

The First-tier Tribunal has granted the appellants leave to appeal. Despite that HMRC expects ‘those using these or similar arrangements to pay the PAYE income tax and National Insurance they owe following this emphatic win’. If any of the sums are irrecoverable...