ESM10004 - off-payroll working legislation: Chapter 10, ITEPA 2003 (from 6 April 2021): basic principles: Managed Service Companies (MSC) and off-payroll working

Chapters 8, 9 and 10, Part 2 ITEPA 2003

Where the worker’s intermediary is a limited company it could be considered to be a managed service company (MSC) if certain qualifying conditions are met (see ESM3500). Where both the MSC legislation and Chapter 10, Part 2 ITEPA 2003 can apply, Chapter 10 will take precedence. If both the MSC legislation and Chapter 8, Part 2 ITEPA 2003 can apply, the MSC legislation takes precedence. This page sets out these scenarios in more detail.

Medium or large-sized non-public sector organisations
Pre-6 April 2021

The MSC legislation at Chapter 9, Part 2 ITEPA 2003 applies, not the intermediaries’ legislation at Chapter 8, Part 2 ITEPA 2003, where:

  • payment is made for the services pre-April 2021,
  • the client is a medium or large-sized non-public sector organisation, and
  • the worker’s intermediary is a MSC.
Post-6 April 2021

Chapter 10, Part 2 ITEPA 2003 must be considered first and, if it applies, the MSC legislation at Chapter 9, Part 2 ITEPA 2003 will not apply where:

  • payment is made for the services post-April 2021,
  • the client is a medium or large-sized non-public sector organisation, or a public authority, and
  • the worker’s intermediary is a MSC.
Public authorities
Pre-6 April 2017

The MSC legislation at Chapter 9, Part 2 ITEPA 2003 applies, not the intermediaries’ legislation at Chapter 8, Part 2 ITEPA 2003, where:

  • payment is made for the services pre-April 2017,
  • the client is a public authority, and
  • the worker’s intermediary is a MSC.
Post-6 April 2017

Chapter 10, Part 2 ITEPA 2003 must be considered first and, if it applies, the MSC legislation at Chapter 9, Part 2 ITEPA 2003 will not apply where:

  • payment is made for the services post-April 2017,
  • the client is a public authority, and
  • the worker’s intermediary is a MSC.