I have received a letter from HMRC Local Compliance informing me that one of my client's company is to be treated a Managed Service company (MSC).
The letter cites a company, Costelloe Business Services (CBS), being investigated and identified as a MSC provider.
CBS is no longer trading. My client used CBS from the period the company started trading in October 2008 until March 2009 when they switched accountants to me.
The company's only activity is the provision of social care services through agencies. The sole director and shareholder provides these services.
Remuneration has been based on minimal salary and balance in dividends.
When she moved to me I explained to her that she would be responsible for ensuring all her contracts with agencies were IR35 compliant herself. I would then continue to prepare her company accounts and payroll with minimal salary and balance in dividends.
Any guidance in how I should deal with this situation would be much appreciated