Budget Note – MSC Legislation Changes

Aside from the increases in beer, wine, cigarettes and duty on most polluting cars,
the second most important issue for you will obviously be the MSC legislation
update.

The Government has confirmed that legislation will be introduced to achieve the
objectives set out in the consultation document. But it is responding to key concerns
raised during the consultation and will:

• • strengthen the definition of a Managed Service Company (MSC) to give greater clarity and
    certainty;
  • amend the debt transfer legislation to make clearer that those simply in receipt of the
    services of a worker operating through an MSC are not within its scope;
    and
  • delay the application of the debt transfer legislation to third parties (other than
    MSC scheme providers, and directors, office holders or associates of the
    MSC) to allow more time to make the necessary changes to their operations.

Despite earlier Treasury denials that there would be any delay the fact that there is
delay in the third party liability for agencies until January 2008 is clearly
good news for most agencies.  However, those regarded as associates of an MSC provider could still remain liable for
debts arising from August 2007.

The seminar on 3rd April was extremely well-received. Bookings are provisionally being taken for a second seminar on 25th July.