“e-solo offers the best solution for CONTRACTORS, AGENCIES AND END-CLIENTS with regard to protecting themselves from unbudgeted costs that could arise from future Managed Service Company Legislation or IR35 Legislation investigations by HM Revenue & Customs.”
"e-solo includes a review of contract terms and conditions and working arrangements (this typically costs £100), through leading tax compliance specialists Qdos Consulting Ltd, to clearly establish employment status and to comply with the IR35 legislation."
"Included within the cost of the software is an insurance policy underwritten by Qdos Broker & Underwriting Services Ltd on behalf of leading insurer AXA which covers all parties in the contractual chain against the costs of legal and accountancy fees in the event of an HMRC enquiry or dispute (typically costs £100)." See the tax enquiry insurance page for more details.
There are two pieces of legislation that you need to be aware of; the Managed Service Company legislation which came into effect 6th April 2007 and the Intermediaries legislation (commonly referred to as IR35) which came into effect 6th April 2000, see the links below.
MSC - Managed Service Company Legislation
http://www.hmrc.gov.uk/employment-status/msc.htm - HMRC opinion
http://www.hmrc.gov.uk/employment-status/monitoring-legislation.htm
HMRC clearly states that the legislation was introduced to address the issue of contract workers seeking to avoid paying employed levels of tax and NIC by paying the bulk of their earnings as dividend. It was not introduced to stop those genuinely in business on their own account providing their service through their own personal service companies.
http://www.qdosconsulting.com/qdosmain.asp?file=vknstnpr4btq - Qdos opinion
As e-solo is a software product as opposed to an accountancy or payroll service, the use of e-solo removes all parties in the contractual chain from the risks associated with the transfer of debt provisions under the Managed Service Company Legislation.
IR35 - Legislation
http://www.hmrc.gov.uk/ir35/responsibilities.htm - HMRC opinion
http://www.hmrc.gov.uk/leaflets/guide_limitcomp.htm#1 HMRC guide
http://www.qdosconsulting.com/qdosmain.asp?file=10qfl8kqschx - Qdos opinion
