Managed Service Companies

What is a Managed Service Company (MSC)?

In simple terms, it is a company where you are considered an employee and subject to employee's PAYE taxes and social security even though you are the owner or director.

The MSC legislation, introduced in the 2007, reinforces the provisions introduced in 2000 by the so called "IR35", to deal with "disguised employment", whereby contractors enjoying the tax, National Insurance and other benefits of a limited company, are in fact doing work identical to that of permanent employees. 

According to the MSC legislation, your company could be a Managed Service Company (MSC) if:

• your business is mainly to provide your own services to third parties
• you receive most of the money you generate
• you pay less tax than an employee would in similar circumstances AND
• you have an MSC provider involved in your business

The queston of the MSC provider is crucial, as one cannot exist without the other. An MSC provider is defined as:

“a person who carries on a business of promoting or facilitating the use of companies to provide the services of individuals (“an MSC Provider”) and is involved with the company"

Conto Direct is not an MSC Provider and we are not involved in your business in any way to promote or facilitate your services:

• in the case of Conto Instant, we license you to use the best web platform for YOU to maintain your records, accounts and business processes
• for Conto Accountancy, we provide end-of-year traditional, competent and prudent company and personal statutory returns and accounts: these are typical accounting professional services that fall outside of the scope of the MSC legislation

For further details please click here for HMRC Managed Service Company Guidance.