Freelancers warned of hefty tax bills as HMRC issues new guidance on managed service companies

HMRC has reiterated that freelancers should not benefit from tax advantages if their businesses are essentially managed by someone else, emphasizing the risks involved.

The average tax liability pursued by HMRC for freelancers associated with MSCs is about £57,000, showcasing the severe financial implications at stake.

Seb Maley of Qdos warns that freelancers might be unaware of the complexities and pitfalls of MSCs, often leading to unwarranted tax liabilities.

Ongoing investigations highlight the urgent need for freelancers to understand the implications of MSC legislation, with over 1,000 contract workers under scrutiny by HMRC.

Read at bmmagazine.co.uk