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I have 30 or so ex-MSC clients (mainly drivers) although some now from traffic management. The MSC providers such as:
Think Accounting Ltd (ceased trading) then seamlessly moved to New Wave Accounting Ltd (ceased trading) then and again moved seamlessly to Igloo Accounting (ceased trading) etc.
Nova Contracting Ltd (in its many guises) et al.
It is a fact that many foreign nationals had no idea they were a director (no inkling as to a directors responsibilities) and in many cases had been registered for vat without their knowledge (they never saw any of the flat rate vat benefits).
The reality that such fraud and money laundering is allowed in the first place is preposterous, but despite mine own as well as I'm sure many others' protestations HMRC and Companies House seem toothless and/or unwilling to prevent such activities. The use by contracting companies of MSC's and umbrella companies is a shameful exploitation of workers. The umbrella employee MSC director believe they are benefiting, but they will suffer when HMRC comes knocking for back taxes, which they are properly entitled to do.
There is a disgusting stench about the activities of MSC and umbrella company providers and this practice should be explicitly outlawed, that is my humble opinion!
The reality that such fraud and money laundering is allowed in the first place is preposterous, but despite mine own as well as I'm sure many others' protestations HMRC and Companies House seem toothless and/or unwilling to prevent such activities
Mikolaj, don't be surprised. It's the same as with the so-called "Contractor Schemes"... HMRC are martyring tens of thousands of end-users, while the promoters get off scot free and continue peddling the exact same stuff in the open. They always go for the average Joe, the so-called "soft target", NEVER for the providers of such "solutions". It's outrageous but sadly that's how things work here in the UK.
If 5 test cases owed £160,000 (about £30,000 each), wouldn't 1,000 service companies mean the total tax at stake is around £30m not £3m as stated.
Actually, John, HMRC are empowered by the legislation to go after the MSC's officers (directors and secretary) if the company can't pay. Liquidating will be of no avail.
I know where you're coming from Tony but if you suddenly create a tax bill and there is no money to pay it from any source then really it's pointless.
Hopefully the following will apply then. "if the MSC does not pay over the tax and NIC deemed to be due on the worker’s income, that tax debt can be transferred to the MSC provider and to then on to the directors of the MSC provider."
New Wave Accounting was only set-up due to HMRC sniffing around Think Accounting and Igloo Accounting was only set-up again, due to HMRC sniffing around New Wave. The director and his 'advisers' knew what they were doing and knew that they were an MSCP.
HMRC have been looking into the directors for years but nothing seems to have been done even though they meet all 3 forms of involvement. They are nothing more then crooks yet HMRC still allow them to get up albeit under a different guise and yet go on to 'fleece' more drivers that want to earn an honest living. They even lied to their employees about the company going into liquidation and yet told their clients that 'he - the director' was retiring due to ill health. HMRC have refused to help the employees with monies owed and the director kicked the employees out and refused to pay them any monies owed. The 'Ill Health' cited in the letters to clients was plastic surgery paid for using monies belonging to the clients.
HMRC also need to target the agencies that insist their drivers sign up with the MSCP as quite often their are back-handers going on - certainly the case with some agencies that used Igloo Accounting.
HMRC - please do not allow these companies to keep getting away with this kind of fraud/money laundering.
HMRC found a very soft opponent in CBS, hopefully later on they will come across an organised organisation and come un-stuck.