Managed Service Company
Worker, Intermediary, Client, Agency & Scheme Promoter
Worker(s)
- 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
Client
- for contracts within the scope of IR35
- no obligation on Client to account for Workers 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
Agencies
- 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
