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What are managed service companies (MSCs)?

Many people supply their services to clients, not directly as a self-employed person, but via a company, known as a personal service company (PSC). The tax and NIC advantages of this way of working are significant. See the Off-payroll working (IR35) for small clients ― overview guidance note. It is worth thinking about the different typical profiles of those temporary workers, who work through an intermediary business so that they are not paid directly by the client, within the following different categories:

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   the individual may want to establish their own stand-alone business by setting up their own personal service company (PSC) or partnership. Typically this will involve setting up a new legal entity and bank account in the name of that company, with the individual having control of that company’s bank account and deciding how any directors employees or shareholders will be rewarded for their input. Such arrangements are not seen as ‘non-compliant’ as such by HMRC but the client’s arrangements with the PSC may nonetheless accrue PAYE and NIC liabilities, based