Managed Services Companies Legislation. As shareholders, they can then receive minimum salary. Hmrc now defines managed service companies as companies that provide the services of individual contractors to 3 rd party clients and which are also ‘involved’ in the provision of those services.
How the legislation works in practice. When the legislation came into force in 2007, many existing managed service company scheme providers claimed they could circumvent the law yet still continue to offer the same sort of services to contractors. The managed service company legislation was introduced in 2007 as a way to stop contractors benefiting from the tax advantages of running a limited company without taking on the risks and responsibilities of being in business on their own account.
Being ‘involved’ means they would be financially benefiting from the provision of services and/or.
Introduction of ir35, commons briefing paper cbp914, 6 september 2018. In its note spotlight 32, hmrc highlights the implications of this little known legislation that could be applicable to contractors. Services to clients using an intermediary company. The managed service company (msc) legislation was designed to combat the perceived tax abuse by contractors who provided their services via a limited company of which they were one of a number of unconnected shareholders, commonly referred to as composite companies.