A Managed Service Company (MSC) is caught by separate legislation (Chapter 9, Part 2 of ITEPA 2003, in force since 6 April 2007) that is distinct from IR35 and can be more dangerous, because it does not depend on a status test. Where a company is an MSC, all payments to the worker are treated as employment income subject to PAYE and NIC, with no "outside" finding available to win.
A company is broadly an MSC where: its business is wholly or mainly providing the services of an individual; payments to the worker make up most of the company's income; those payments exceed what PAYE would give; and an "MSC provider" is involved with the company (a person who promotes or facilitates the use of companies to provide individuals' services and is involved in running them). The biggest danger is that unpaid PAYE can be transferred as a personal debt to the worker, the directors, the MSC provider and certain others.
The key point for choosing an accountant is the carve-out in ITEPA s.61B(3): a person is not an MSC provider merely by providing accountancy or legal services in a professional capacity. The danger zone is where an "accountant" goes beyond advice into controlling the company's finances or selling a packaged, standardised "company run for you" product. HMRC has pursued the firms Churchill Knight and Boox, but those test cases are listed for First-tier Tribunal hearings in June 2026 and November 2026 and are not yet decided. The firm's stance is risk management: use an accountant who clearly advises (you make the decisions and could leave freely), and we do not assert any named model is or is not caught.