Budget 2007: Managed service companies – The end of the road? By Rebecca Benneyworth
The Budget brought the next phase in the Government’s move against the managed service company (MSC) sector. With veiled comments in the Red Book about “the withdrawal of labour income as dividends”, probably addressing the tax motivated incorporation of service based businesses, the big guns are reserved for what HMRC clearly sees as the “worst offenders”.
Since the publication of draft measures in the Pre Budget Report in December, much thought (and not a little action) has clearly been put in on both sides to wrestle with this problem.