ESM3600 | Managed Service Companies (MSC): Workers paid through an MSC

The nature of Managed Service Companies is such that many workers may not:

• Realise that they are in fact being paid through an MSC; or

• Fully understand whether the nature of the relationship between their company and their Provider is such that their company is an MSC.

Whether a Personal Service Company is an MSC or not is determined by both the nature of the MSC Provider’s business and the relationship with client company’s. This determination will depend on the individual facts of each case.

Where a worker has any doubt regarding the status of the company through which they provide their services, they are recommended to seek independent professional advice.

However, where a worker is not paid directly by an agency, the client, or the person engaging them, and if:

• They are paid via a limited company; and

• Someone else manages and administers the company; and

• They are paid partly in salary and partly in dividends; and

• A fee is deducted from the income paid by the agency, client or person engaging

then the worker may be working through an MSC. If they are a director of the company, then they have personal responsibility for various obligations under company law, regardless of the fact that the company may have been set up and run wholly on their behalf.