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tax, service, company, hmrc

A taxing issue: Lords to investigate Personal Service Companies

20 November 2013

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The House of Lords has formed a new Select Committee to consider the consequences of the use of Personal Service Companies for tax collection.

Likely Questions

Specific questions the Committee are seeking to answer in this inquiry include:

  • To what extent are Personal Service Companies being used for the provision of personal services to UK businesses?
  • To what extent are PSCs still used in the Public Sector, and should those engaged in public bodies be prevented from working through a PSC?
  • What is your view of the effectiveness and efficiency of the intermediaries legislation which was first introduced in 2000?
  • Is more guidance and advice needed to aid individuals in judging the status of business transactions for themselves or should further resources be given to HMRC for compliance efforts?
  • Are individuals forced into the use of a Personal Service Company as a prerequisite for being considered for work?   If so, what can be done to ensure that the use of a Personal Service Company is appropriate for the individual?
  • Aside from the issues of Tax and National Insurance, what are the wider benefits and drawbacks for the individual of using a Personal Service Company?

Committee Chairman

Chairman of the Committee, Baroness Noakes, said:

"This inquiry will form a wide-ranging review of the use of Personal Service Companies. During the course of this new inquiry, we will consider extent to which Personal Companies are used and the implications for tax, National Insurance and other wider issues, both from the point of view of workers and those who engage them. Government receives the tax it should rightfully be receiving, from all those who should be paying it. 

"Equally, we need to ensure that our tax system does not place unreasonable burdens on taxpayers. Of course, this is a complicated topic. This is why I would encourage anyone who has an interest or experience in this area to send us their evidence and contribute to the debate."

Further information