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HMRC internal manual

Employment Status Manual

Managed Service Companies (MSC): Offshore MSCs

Where the worker is resident in the UK and the work is undertaken in the UK, the MSC is treated as having a place of business in the UK, whether or not it in fact does so. This means that the MSC must apply the new legislation.

If under these circumstances the MSC fails to operate the MSC legislation, HMRC will seek to transfer the PAYE and NICs payable to other persons resident within the UK as set out in the transfer of debt provisions.

Those persons who encourage or are actively involved with Managed Service Companies (see section 3 of the “Guidance on transfer of PAYE /National Insurance contributions debts of Managed Service Companies”) operating from an address outside the UK, inevitably run a higher risk of having the company’s PAYE and NICs transferred to them under the transfer of debt provisions.

See also ESM3565.