Personal service companies

There is no clear definition to what constitutes a personal service company and it makes life difficult for people who prefer to work as a contractor, either through a limited company or as an individual.

HMRC stepped in with a new tax formula to stop a small minority who claimed payment through a limited company and paid themselves in dividends rather than salary, thereby escaping some tax and national insurance elements.  However, contractors often claim that the taxman is using the new regulations to their advantage when investigating their tax affairs.

Often the cases come down to establishing the dividing line between employment and self-employment, but the regulations are complicated and we recommend any sole trader who works as an individual or through a limited company to get advice from our team of experts.

Getting personal

Personal service companies
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