HMRC has issued new guidance to warn freelancers, contractors and consultants about the risk of “Managed Service Companies”, which could land thousands with huge tax bills.

The Managed Service Companies (MSC) legislation was introduced in 2007 to combat perceived tax abuse by freelancers who provide their services through a limited company set up for the purposes to avoid tax.

These companies, which are controlled by a third-party, are known as Managed Service Companies.

HMRC believes that…