Legislation Guide

There are many pieces of legislation which affect Limited Companies. We’re here to guide you through and provide the right advice.


Download our latest IR35 Guide for contractors here >

Managed Service Company

The Managed Service Company ("MSC") legislation was introduced on 6 April 2007 and was brought in to stop individuals who were not genuinely running their own company from receiving the potential tax benefits of being in business.

MSC applies where an individual provides their services via an intermediary, usually a personal service company or a partnership, but the intermediary is effectively being operated by a third party. If MSC does apply all payments received by the contractor should be fully subject to PAYE/NIC, including any expenses reimbursed.

Any PAYE/NIC's liabilities arising become the personal responsibility of the Company Directors and/or shareholders (or partners in a partnership), whilst also becoming potentially transferrable to the third party which is running/managing the intermediary company, known as an MSC Service Provider.

An intermediary must consider whether the MSC Legislation applies before considering IR35, but intermediaries that do not meet the definition of an MSC must continue to consider IR35.

How Umbrella Accountants comply with MSC

Umbrella Accountants simply offer you the choice to select the most appropriate accountancy support you need for your business, we do not run, manage or control your business – you are in total command of your company.

We will discuss whether an umbrella service better suits your circumstances or if a limited company solution is more suitable. If you decide our limited company service is the best for you, we will discuss the level of accountancy support you may require, the type of pay structure you may wish to adopt, the types of expenses which you may incur and whether you can receive tax relief, whether you want a payroll operated and various ad hoc services if and when you require. You can choose any level of service you wish, whenever you may need it but to make things easier we offer 3 main services that suit most contractors running their own limited company.

If you set-up your own limited company Umbrella Accountants are not involved in the day to day running or management of the company. It is your company, you have complete control to make decisions on how to operate and provide services, you are responsible for finding work and getting paid, but with it you do have various legal responsibilities.

We do not manage your bank account nor are we an authorised signatory. You have sole authority to make payments from it, including meeting any income tax, corporation tax PAYE and VAT liabilities of the company.

We review your specific circumstances in full but you decide which is your favoured option from being paid direct by your agency through PAYE, being paid through Umbrella or by setting-up your own limited company.

Running your own company doesn't need to be difficult and the benefits can be rewarding. We are here to help, but the level of support is your choice.

The Senior Partner of Umbrella Accountants is a Chartered Accountant and holds a Practising Certificate issued by the ICAEW.

For £225.00 plus VAT per year IR35 experts Bauer and Cottrell supply unlimited IR35 contract reviews. They will review all of your contracts entered into during the year (including any extensions), all associated documents and your working practices and give you an independent pass or fail IR35 opinion in writing.

  • After this company was recommended to me I was contacted by Robert Charlton. Robert emailed me all the necessary documents to setup a limited company and gave good advice over the phone. Excellent first impression which led me to sign up. Martin February 2022

  • Nicola Worthington was amazing BBC reported today that "More than three million people have yet to file their self-assessment tax return just days before [the] deadline of 31 January". Despite the pressure, Nicola Worthington completed my self-assessment tax return quickly and professionally. She was very responsive and promptly answered all of my questions. Fantastic work.Marcus January 2022

  • Professional and reliable company in the 5 years of using their service. Thanks to Nicola Worthington for all your support in submitting my self assessments in a timely and accurate fashion.S Moore December 2021

  • Umbrella have been dealing with my account/tax matters for the last 10 years with an extremely profession approach. I have always received accurate information and helpful advice from Nicola Worthington. I would have no hesitation in recommending Umbrella for all accountancy matters.D Sewell November 2021

  • Nicola has been fantastic - kept me informed and very professional.D Norman November 2021

  • Nicola has been fantastic - kept me informed and very professional.Dale Norman October 2021

  • Very helpfull and prompt. Always came back as promised and provided the necessay information and guidanceM manir October 2021

  • Nicola Worthington has been a credit to Umbrella Accountants. She has always offered considerable professional advise to myself on my accounting and my tax affairs as and when required over the past few years. I would recommend both Nicola and Umbrella Accountancy Services.AC September 2021

  • I started my company in 2016 when I was offerred 6 months contract work. Now sadly I'm closing my company as I've moved back to PAYE work. Nicola Worthington and team have been very helpful with my accounting and tax affairs and has made it as easy as possible for me to understand what I needed to do. All the best AndyAndy September 2021

  • I have been with Umbrella for around 2 years now since they set up my limited company for contracting purposes. I have found their service to be very reliable and really enjoy the ease of using the freeagent service. A special mention also to my accountant Nicola Worthington, whose knowledge and expertise have been so valuable. Along with that, her availability to answer questions at critical times have been really vital for me and my business - thank you.Stephen Roberts September 2021