HMRC turns up the heat
HM Revenue & Customs (HMRC) is turning up the heat on its Managed Service Company (MSC) investigations, and in articles on Friday 17 and Monday 20 May, Recruiter online reported that HMRC has already achieved results in recovering monies by using the debt transfer provisions in the MSC tax legislation.
Friday’s article referred to a Freedom of Information (FOI) request made by Lawspeed, the recruitment law specialist, earlier in the year.
Commenting on the two articles Adrian Marlowe, MD of Lawspeed, said: “Recruiter is right to draw attention to this issue. We had raised two FOI requests last year when we heard that HMRC enquiries in this area were significantly on the increase. The responses confirmed that position and we publicised this fact in January.”
Lawspeed believes that the new emphasis changes the dynamic. As a result in April it reviewed its umbrella SPA audit service which is designed to help agencies check the MSC risk of dealing with contractor service providers.
“We have both reduced cost to service providers and broadened the scope of the audit,” said Marlowe. “We are now able to check risks in other areas, for example to check compliance under the Agency Workers Regulations (AWR), particularly the Swedish Derogation. However the underlying principle is the same, to provide a free service to agencies that enable them to reduce risk.
“Under the MSC legislation HMRC can transfer debt to recommending agencies, and under the AWR agency workers can make claims against agencies and hirers, leaving agencies and their directors (under the MSC) open to exposure.”
Marlowe concluded: “The only sensible way to reduce risk is to check compliance by obtaining an independent legal audit of the service provider concerned.
“Both issues are legal rather than accounting matters and so the Lawspeed SPA audit is undertaken by legal professionals and is fully insured. Also the structure is careful to ensure there is no conflict of interest so that agencies obtain genuine independent advice, addressing the need arising from the legislation.”
For more information about the Lawspeed SPA service, free to recruitment businesses, call 01273 236 236 or email [email protected]
To read the Recruiter article click here
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.