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Managed Service Companies - Special Reports

Managed Service Companies Contents:


On 6th December 2006 the Chancellor announced in his Pre-Budget Report that further measures would be introduced in April 2007 to tackle tax avoidance by Managed Service Companies. The Managed Service Company (MSC) legislation was implemented.

Contractors caught using a Managed Service Company lose the tax advantages of operating via a limited company, and must pay tax amounting to the same as if they were on the clients payroll. This is equivalent to being caught by IR35.

This section explains the MSC legislation, and provides updates and guidance.

TopKey Information for Contractors

Contractors should avoid taint of MSC brush, says lawspeed
Now that the managed service company legislation is in place, contractors should take specific steps to avoid risk.

Changes in the final MSC draft offer help to contractors
Jonathan Legg of Lawrence Graham explains the importance of the changes made before the final draft of the MSC legislation was established.

Managed service companies - new revenue guidance for contractors
Contractors have a better idea of what the managed service company legislation means for their businesses now that the Revenue has issued guidance about it. But some areas, regarding agencies for example, need more.

Contractors should vet providers carefully, says HMRC
At a meeting organised by the PCG, Treasury policy director Robin Wythes told contractors to carefully vet their service providers to ensure that they do not fall under the new managed service company legislation.

Contractors need to know what is a managed service company?
The definition of an MSC is becoming the object of controversy. The Professional Contractors Group sets the record straight.

After the MSC legislation what should contractors do with existing contracts?
In the light of the Managed Service Companies (MSC) legislation in the recent Budget, what options do contractors have open to them with their contracts and what should they do to make sure they are compliant?

Contractor tests to see if suppliers are Managed Services Company (MSC) providers
Contractors can avoid MSC rules and non-compliant service providers, says Stuart Davis in his first interview since becoming SPA Chairman.

TopOther relevant information

Reasons and practicalities of moving from an umbrella to a limited company
Discusses the reasons and steps to take to move from an umbrella arrangement to a limited company.

Choosing an umbrella services company
This guides explains the many factors to consider when choosing an umbrella company. Follow our advice to get the best.

What is a PAYE umbrella company?
Learn how a PAYE umbrella model works. It's simple, quick, and you can be up and running within a day. Find out more.

Limited company or umbrella – how to choose the best payment option
Key differences explained. Learn the pros and cons of each payment option and decide which one is best for starting your contracting career.

Valid expenses as a contractor - what you can claim
We describe in detail what expenses are allowed to be claimed when you are contracting.

What is IR35? Does it apply to your contract?
It is tax avoidance legislation designed to ensure workers using an intermediary but who are ‘disguised employees’ pay the correct amount of tax.

Financial impact of IR35 on contractors
A contractors take home pay is reduced by up to 25% when caught.

New managed service company calculator released
Use our brand new calculator to determine if you are caught by the new Managed Service Company Legislation, and what the financial impact on your pocket it likely to be.

TopWhat are Managed Service Companies?

What is a managed service company?
Find out what a Managed Service Company is, and why you should not use them.

Managed Service Company (MSC) legislation – key guide for contractors and agencies
Contractors using managed service companies are taxed as employees. Debt transfer rules allow HMRC to ask agencies/clients for contractors’ tax owed.

TopAbout the legislation

Proposed changes to managed service companies - explained
Explains the legislative changes introduced in the 2006 Pre-Budget Report

^ TopCalculating the cost

Managed Service Company Legislation Calculator
Find out if the legislation affects you, and the resulting decrease in your net income.

^ TopLatest news

MSC Tax Tribunal outcome could have wider repercussions for contractors, warns expert

Contractors who used an MSC provider could be at risk following the Christianuyi Ltd & Ors v Revenue & Customs ruling, warns Andy Vessey of Qdos.

Others | Wed, 04 May 2016

Managed Service Company (MSC) legislation – key guide for contractors and agencies

Contractors using managed service companies are taxed as employees. Debt transfer rules allow HMRC to ask agencies/clients for contractors’ tax owed.

Others | Mon, 22 Aug 2011

Contractor tests to see if suppliers are Managed Services Company (MSC) providers

Contractors can avoid MSC rules and non-compliant service providers, says Stuart Davis in his first interview since becoming SPA Chairman.

Others | Thu, 28 Jan 2010

Will contractors foot the bill for HMRC blitz on Managed Services Company providers?

New guidance issued by HMRC targets offshore and self-employment MSC providers, leaving contractors at risk from debt transfer provisions.

Others | Fri, 05 Dec 2008

Audit standards for service providers help contractors

Contractors will be aided by having service providers who can comply with HMRC audit standards. It's about getting good advice.

Others | Wed, 16 Jan 2008

Contractors risk falling into dodgy schemes under new law

The plan to audit service providers will mean that new contractors get good advice and avoid traps

Others | Mon, 29 Oct 2007

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