28 March 2007

Helping you cope with the latest changes in legislation brought about by the Budget 2007

Over the last 3 months, the team at Brookson have been actively consulting on your behalf with the Treasury and HMRC to help us provide you with the very best advice and support in relation to the legislation the government was proposing to implement.

From the Chancellor’s Budget statement issued on Wednesday 21st March, it is now clear that the government has at this late stage significantly changed the wording of the proposed legislation resulting in it being drafted much more broadly than anybody had been led to believe, thereby capturing not just composite companies but also certain personal service companies.

Following the Budget, we have continued to take the most diligent approach and have invested in the very best advice, on your behalf, to ensure that any advice and support we give to members is market leading and the most compliant.

As at any time when there is such significant change there are many less scrupulous and less diligently compliant providers who seek to jump on the bandwagon for their own short-term commercial gain. As you know, this has never been and never will be the Brookson way. We feel very strongly that, to be able to give the very best advice and support, diligence and compliance must come before anything. Without this we would be letting our members down, or worse putting them into a position of unacceptable risk.

The change to the legislation has forced us to adapt the way in which we work in order for us to continue to provide the support and advice that will enable you to work in the way that you wish, and continue to take the dividends you work hard for.

With these enforced changes in mind, and seeking to ensure that you have the support of one of the markets most experienced providers, Brookson is taking steps to provide you with the most appropriate & compliant services.

The most important aspect of these changes is that we are focusing on our core as a provider of professional accountancy services to freelance professionals, thereby being exempt from the legislation. This makes sure that we can help you look after your business in these changing times.

It is very important to the whole Brookson team that we are still able to maintain our award winning levels of service, our market leading value for money and our diligent compliance procedures which the HMRC have given their seal of approval to.

Our un-rivalled experience in supporting professional freelancers has led us to develop our bespoke Navigator tool to help advise you on the best way of working for your circumstances.

One of the downsides to the new legislation is the fact that some of the work burden and hassle must be passed to you. If you are not self billing we will continue to invoice for you, on your instruction and any expense forms sent in by you will be processed in the normal way. We will immediately provide you with information, which will allow you to decide how much money you should take personally. You will have to organise the transfer of payments of your money from your company account to your own personal account, a job that used to be done by your provider. This is a requirement of the new legislation.

You will be receiving a chequebook, which will enable you to transfer your funds. Other methods of payment will be available also from RBS.

Leading Tax Counsel has indicated that the provision of insurance services may be outside the scope of accounting services that we are permitted to provide under the new legislation and consequently Brookson will not be providing insurances after the 6th April. Kingsbridge Risk Solutions Ltd, an independent FSA registered insurance broker, who have been providing these insurances for our Members for several years have confirmed that they will provide these insurances to your limited company should you so wish.

In order to help members through this transition period, Kingsbridge have arranged for the current insurance cover required from a contractual basis (i.e. Professional Indemnity, Employers’ Liability and Public Liability) to be provided to your personal limited companies to be put in place up until 30th June 2007 at no charge to Brookson Members. During the next few months, Kingsbridge will contact all Members individually to offer renewal terms from 1st July onwards.

The changes to the MSC legislation do not stop us from providing our normal tax compliance services. We will continue to monitor your tax status in relation to the “intermediaries legislation” (IR35) through our employment status check, supported by DWF Solicitors.

In light of these changes the Brookson fee will not be the original £34 per week plus VAT and expenses processing fees quoted to you, but instead it will be £26 per week plus VAT and inclusive of expenses.

For those members who do not want to take on the responsibility that comes with the new limited company legislation, we will still be providing our Brookson Umbrella service (PAYE + Expenses), which for the moment does not fall within the current MSC legislation. This service includes insurances and Care Plan for £20 per week. Please contact one of our Navigator Advisers on 0845 058 1300 if you require more information of our Umbrella Service.

For your additional information a more detailed explanation of the new draft MSC legislation issued by HM Treasury following the Chancellor’s Budget speech can also be found within this news area.

As always, should you require any further explanation of any of the issues covered in this letter, or require any further information, do not hesitate to contact our Membership Services Team on 0845 058 1200.

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