Service Companies

The Revenue seems to have figured something out in respect of Managed Service Companies and the practice of hiring temporary staff through limited companies, sometimes known as Personal Service Companies. It is unclear from the Budget speech and the related press releases exactly what the changes will be, but the focus is likely to be on the practice of paying individuals in dividends for what is essentially an employment contract. The first impression is that this will affect people contracting to agencies (set up as MSCs) rather than to those operating independently on the advice of a chartered accountant. Accountancy and legal practices established as MSCs appear to be exempt. Lawyers working in this area should sharpen their pencils now.

LegalDay Budget 2007 Links