Composite companies - Composite company

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Composite companies involve complex and artificial share structures to enable the right dividends to be paid to the right contractors for the right contracts. It would therefore be difficult to describe a composite company as a genuine business which markets itself to end clients to provide consultancy services. Indeed, this is what the Chancellor has picked up on in the Managed Service Company rules or MSC Rules.

The Chancellor's argument is that it is fairly obvious from their very nature that composite companies exist only to provide a convenient and tax efficient entity via which to remunerate their contractors/shareholders.

IMPACT of the MSC Rules:

In summary, the MSC Rules do NOT outlaw composite companies but they DO force composites to pay the full amount of tax and NIC as if the contractor were an employee. This means there are NO tax breaks available from composites.

PLEASE READ OUR MSC RULES SECTION:

Please read our section on Managed Service Companies or MSC's to ensure your understanding of composite companies is up to date.

Alternatives to composites:

We have assumed our site is mainly used by contractors who are intending to contract in the long term. Those who are intending to contract in the long term but who are still using a composite company, may find it beneficial to switch to a Limited Company.

On the next page we outline why this might be beneficial and/or suitable and also how you can make the switch.

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Full index of pages:

Home Page IR35 Background - page 1 IR35 Background - page 2 IR35 Background - page 3

IR35 Rules - page 1 IR35 Rules - page 2 Beat IR35 - page 1 Beat IR35 - page 2

Beat IR35 - page 3 Beat IR35 - page 4 Ltd Company - page 1 Ltd Company - page 2

Ltd Company - page 3 Ltd Company - page 4 Umbrella Companies - page 1

Umbrella Companies - page 2 Composite Companies - page 1 Composite Companies - page 2

Composite Co - page 3 Composite Co - page 4 MSC - page 1 MSC - page 2 IR35 Insurance

IR35 Investigations - page 1 IR35 Investigations - page 2 Contracts - page 1

Contracts - page 2 Contracts - page 3 Resources 1 Resources 2 Resources 2 Sitemap