New legislation, effective from 6 April 2007, means that personal service companies which are “managed” by a third party are likely to come under HM Revenue & Custom's new classification which is a “Managed Service Company”.

The rules are that all income received by such companies are subject to PAYE and National Insurance with no allowable deductions.

As such, if you are classified as a Managed Service Company then this is not a viable option for you.

We are not a Managed Service Company Provider and do not have Managed Service Company clients.