Personal Service Companies And The Public Sector

I am pleased that a new duty has been introduced on public sector organisations to ensure that everyone who works for them through their own limited company, called Personal Service Companies (PSC), pays the correct amount of tax.

Existing rules were designed to ensure that those undertaking similar work to an employee are taxed in a similar way. However, the Government had been aware for some time that some public sector workers continued to contract with public sector organisations through a PSC in order to take advantage of more favourable tax rates than if they were employed on the normal payroll. While this may be appropriate for some legitimate freelance workers, I support the Government's view that it is not right or fair that some workers use this method when they do the same work as someone on the regular payroll.

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