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HMRC internal manual

Employment Status Manual

Managed Service Companies (MSC): MSC Transfer of Debt Provisions - Legislation

The legislation under which a PAYE and Class 1 National Insurance contributions (NICs) debt of a MSC can be transferred to a third party under specified circumstances is:

  • Section 688A, Part 11, ITEPA: Section 688A(2) sets out the persons to whom a debt may be transferred
  • The Income Tax (Pay as You Earn)(Amendment) Regulations 2007. These Regulations provide the detailed mechanics of how a PAYE debt is transferred
  • The Social Security (Contributions) (Amendment No. 5) Regulations 2007. These Regulations provide the detailed mechanics of how a Class 1 NICs debt is transferred.