The long-awaited guidance on the government's managed service companies (MSCs) legislation published by Her Majesty's Revenue & Customs (HMRC) last month has been widely welcomed.

Martin Hesketh, managing director of Brookson, told Recruiter: "HMRC have realised that there are ways for self-employed people to operate through a limited company that is legally complaint, particularly with IR35 and the MSC legislation. This guidance will help everyone understand what is compliant and what is not."

Barry Roback, chief executive at JSA gave the guidelines an "overwhelming welcome". However, he said they needed to go further. Because of the legislation's debt transfer provisions, the government "ran the risk of scaring agencies into withdrawing from giving contractors any helpful advice", for example, about what professional advisers to use. "This could let unscrupulous operators back into the market," he said.

To avoid this, he said: "The government needed to differentiate between agencies who pressurise contractors into arrangements for their own benefit, and agencies who advise them to seek professional advice."

However, Hesketh said: "The guidance shows that to be at financial risk the agency needs to be actively involved with or encouraging a relationship between a contractor and an MSC provider, for example by receiving referral fees. If they are an innocent third party there's no risk, and the guidance shows how they can minimise that risk," he said.

Adrian Marlowe at Lawspeed said the guidance gave "a good idea" of whether those providing accountancy or legal advice fell inside or outside the legislation.