HMRC rejects MSC audit standard as ‘useless’

Tax officials said yesterday the audit standard for managed service companies
(MSC) as it now stood was unworkable and might, in the future, be ‘abandoned

The MSC audit standard was made on behalf of third parties to service
providers such as recruiters who feared that, engaging a provider could, in some
instances, make them liable for unpaid employment debts.

A spokesman for
Revenue & Customs
(HMRC) told Contractor UK its lawyers had
expressed doubts the MSC audit standard, in the form it was being developed, was
within HMRC’s legal powers to implement.

Accountancy firm JSA
initially endorsed the standard, but warned it might have served to
‘severely limit’ the choices contractors had in the marketplace. Barry Roback,
chief executive, estimated the cost for HMRC to audit a single provider’s
business model at £100,000, suggesting ‘only the largest providers’ would afford

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