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HMRC internal manual

Employment Status Manual

From
HM Revenue & Customs
Updated
, see all updates

Managed Service Companies (MSC): Workers paid through a MSC

The nature of Managed Service Companies is such that many workers may not:

  • Realise that they are in fact being paid through a MSC; or
  • Fully understand whether the nature of the relationship between their company and their provider is such that their company is a MSC.

Because whether a company is determined both by the nature of the provider’s business and their relationship with the client companies, ultimately determining whether a particular company is or is not a MSC will depend on the individual facts of the case.

Where a worker has any doubt regarding the status of the company through which they provide their services, they are recommended to seek independent professional advice.

However, where a worker is not paid directly by an agency, the client, or the person engaging them, and if:

  • They are paid via a limited company; and
  • Someone else manages and administers the company; and
  • They are paid partly in salary and partly in dividends; and
  • A fee is deducted from the income paid by the agency, client or person engaging

then the worker may be working through a MSC. If they are a director of the company, then they have personal responsibility for various obligations under company law, regardless of the fact that the company may have been set up and run wholly on their behalf.