Service Provider and Clients Bank Accounts

HM Revenue & Customs (HMRC) has been made aware that there are arrangements being used/marketed which involve a service provider exercising an element of control or influence over their clients’ bank accounts. Where a service provider issues any instructions to a client company’s bank, even when on the written authority of the client, HMRC considers that that constitutes control/influence.

HMRC views any control/influence by a service provider over a client’s bank account as falling within sections 61B(2) (c) and (d), Chapter 9 Income Tax (Earnings and Pensions) Act 2003. Subject to other qualifying criteria applying, such activity will result in the service provider’s client companies being Managed Service Companies.