Managed Service Company

Worker, Intermediary, Client, Agency & Scheme Promoter


  • you are the director and owner of a Personal Service Company
  • you decide if your contract is within the scope of IR35 or not
  • you are the person providing the services
  • you are responsible for the terms you have agreed to

Intermediary that is not a Managed Service Company

  • if a contract is within the scope of IR35
  • the intermediary is responsible
  • an IR35 deemed payment must be calculated
  • the intermediary must operate PAYE and pay Class 1 NIC on all earnings
  • this applies to all relevant contracts i.e. within the scope of IR35
  • contracts outside the scope of IR35 can be excluded


  • for contracts within the scope of IR35
  • no obligation on Client to account for Worker’s tax or NI contributions

Composite Companies

  • workers are also non director shareholders
  • required to operate PAYE if salaries are paid
  • if salaries are not paid therefore no PAYE
  • composite company must consider definition of Managed Service Company
  • if applicable, an MSC deemed payment must be calculated
  • if not applicable, consider contract's scope under IR35
  • if applicable, an IR35 deemed payment must be calculated


  • recruitment agency in the chain between Worker and Client
  • Worker may have Personal Service Company
  • IR35 puts the responsibility for tax & NI on Intermediary
  • unlikely Agency meets conditions relating to an intermediary

Scheme promoters

  • consider if they are an MSC
  • if applicable, calculate MSC deemed payment
  • if not applicable, advise relevant Workers of IR35 liability


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