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The following article, together with questions and answers, are being published in response to emerging developments in the Service Company sector and frequent questions posed to HM Revenue & Customs (HMRC). They are intended to be read primarily, but not exclusively, by

• individuals providing their services through intermediary companies which they do not control
• employment businesses, particularly those placing workers in the construction sector

The term 'Managed Service Company' (MSC) is defined in legislation having regard to certain criteria. In layman's terms, an MSC is one which is provided specifically to enable a worker to avoid tax and National Insurance contributions on employment income. Individuals who arrange for their income to be paid via a company with the intention specifically to avoid employed levels of tax and National Insurance contributions need to consider carefully whether the company through which they are paid may be an MSC.

These articles do not represent a change in policy from HMRC, rather they seek to clarify existing policy in light of recent developments. Particularly, there has been no change of policy in terms of individuals genuinely in busiess on their own account who provide their services though a company which they control.