ESM3645 - Managed Service Companies (MSC): Nature of the Debt following the issue of a Transfer Notice
The debt would remain a PAYE debt. Regulation 97C of the Income Tax (PAYE) Regulations 2003 (鈥渢he PAYE Regulations鈥�) deals with Transfer Notices.
Regulation 97C (2) provides that an officer of HMRC can make a direction authorising recovery of the 鈥渟pecified amount鈥� from an MSC provider (or any other person listed in 688A(2) Income Tax (Earnings and Pensions Act 2003). 97C(1)(b) defines the specified amount as 鈥渢he relevant PAYE debt or part of the relevant PAYE debt鈥�. Therefore, what regulation 97C(2) provides can be recovered under a Transfer Notice is the relevant PAYE debt. Regulation 97C(3) states that after a Transfer Notice is issued to a person specified in section 688A(2), the persons specified become liable for 鈥渢he relevant PAYE debt鈥�.
The nature of the debt therefore does not change, the only change is to the persons it can be recovered from.