HMRC recently published extra guidance on intermediary companies and Managed Service Companies (MSCs).
The Managed Service Company (MSC) regime was introduced because, although the IR35 applies to some intermediary companies enforcing the rules is too difficult and time consuming for HM Revenue and Customs. Additionally, even when a tax debt was established, MSCs would invariably escape payment by ceasing to trade.
- Under IR35 the contractual nature of the relationship between the worker and the client is examined and any deemed earnings are subject to PAYE and NICs.
- Under the MSC regime all sums received by a worker (or an associate of the worker) as a result of participating in an MSC scheme are subject to PAYE and NICs irrespective of the nature of the relationship between the w...