An MSCP is defined as “a person who carries on a business of promoting or facilitating the use of companies to provide the services of individuals.”
Activities that could be classed as promotional include marketing, encouraging and initiating. So, for example, a marketed scheme would sit squarely in this definition. “Facilitating” is any form of assistance that the MSCP provides that encourages the use of limited companies.
As mentioned above, an accountant is excluded from being an MSCP where they are simply providing their accountancy services, however a firm of accountants who carry out a “discernable part of the business to specifically market and/or provide corporate solutions and services” to PSCs would be classed as an MSCP, but only in respect to that part of the business.
Simply because a person is an MSCP does not necessarily mean that their client companies are MSC’s. Crucial to the legislation is whether or not the MSCP is involved with its client company. If the MSCP is not “involved” then the legislation does not apply. “Involved” is defined by reference to any one of the following five activities;
1. that of benefiting financially from the provision of the services of the worker on an ongoing basis.
2. that of influencing or controlling the provision of the services of the worker. The (often compulsory) provision of an engagement contract, dictating /determining the terms under which the worker provides their services or is to be remunerated, are just some examples of exercising influence or control over the worker’s provision of their services.
3. that of influencing or controlling the way in which payments to the worker or an associate are made.
4. that of influencing or controlling the company’s finances or any of its activities.
5. that of giving or promoting an undertaking to make good any tax loss. Where an MSCP or an associate either offers insurances, ie tax loss insurance, against the tax and NIC liabilities arising under the MSC legislation, IR35, or indeed any other provision of the Tax Acts or National Insurance legislation, they will be involved with those client service companies to which they either offer or promote such insurance.
See below table demonstrating services that constitute being involved & not involved;
