HMRC have released their latest news on the MSC legislation and its effects upon recruitment agencies: http://www.hmrc.gov.uk/employment-status/monitoring-legislation.htm

HMRC make it clear that:

• Using a PSC is a legitimate way to operate;
• It is not correct that agencies should only refer to umbrellas;
• HMRC would rather agencies refer to compliant providers (for PSC services) than allow contractors to use non-compliant schemes.

Addressing the recruitment industry, HMRC state that:

“It is important to remember that the legislation was introduced to address the issue of workers seeking to avoid employed levels of tax and NICs. It was not introduced to stop those genuinely in business on their own account providing their services though service companies.”

For further information on the legislation visit: http://www.hmrc.gov.uk/employment-status/monitoring-legislation.htm