HMRC has updated ‘Spotlight 32’ in the series on tax avoidance schemes it is actively challenging, following the Upper Tribunal decision in Christianuyi Ltd and others [2018] UKUT 10 (TCC) involving managed service companies.
The Upper Tribunal upheld the earlier decision of the First-tier Tribunal, in addition to which it considered further the definition of a managed service company (MSC) provider. HMRC says this has confirmed its view that a person is a MSC provider if it:
promotes or facilitates the use of a company; and
that company provides the services of an individual.
The Upper Tribunal also gave the words ‘influences’ or ‘control’ a wider meaning than in the First-tier Tribunal decision. The provider had influenced how payments were made to workers through the use of a standard product. When workers buy into standard products, allowing the MSC provider to determine the amount to be paid as a dividend and to carry out the administrative steps, this amounts to ‘control’.
HMRC has updated ‘Spotlight 32’ in the series on tax avoidance schemes it is actively challenging, following the Upper Tribunal decision in Christianuyi Ltd and others [2018] UKUT 10 (TCC) involving managed service companies.
The Upper Tribunal upheld the earlier decision of the First-tier Tribunal, in addition to which it considered further the definition of a managed service company (MSC) provider. HMRC says this has confirmed its view that a person is a MSC provider if it:
promotes or facilitates the use of a company; and
that company provides the services of an individual.
The Upper Tribunal also gave the words ‘influences’ or ‘control’ a wider meaning than in the First-tier Tribunal decision. The provider had influenced how payments were made to workers through the use of a standard product. When workers buy into standard products, allowing the MSC provider to determine the amount to be paid as a dividend and to carry out the administrative steps, this amounts to ‘control’.
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