PSC definition

[blackstreet]

Team

Have to say im gutted with the latest budget announcements. Makes me wonder whether i should be going back to the perm world after only 1 year as a contractor.

What im trying to understand is how we define Personal Services Company in relation to the removal of the expensing subsistence and travel. Im a LTD company, with myself as a sole director, so would i belong in this category. I was previously under the impression this would target umbrella company users, but it seems to be expanding beyond that. I am very rigid on the contracts i take to ensure i am not under SDC, but is this enough. I fear if this is removed, alongside all the other limitations, i will have to exit and go perm.

[northernladuk]

Don't you think that's a bit of a knee jerk reaction until you find out exactly how much it will cost you?

[tractor]

..

A post from someone in 2005

As far as I'm aware, legally there is not such thing as a PSC, it's something El Gordo stared throwing around a few years back.

Most likely it is an attempt to get contractors to start calling themselves PSC's so that he can create tax legislation that has a detrimental effect on PSC's but not other LTD companies.

I will not be classifying myself as a PSC until i'm forced to by law.

And so it has come to pass. Should have fought harder against the term between now and then. I fear it is too late now.

As for giving up, you are considering jacking all the benefits in because you are going to pay around 2k more in tax? Not a good basis for that decision imo. Perhaps when he racks the base rate up to 20% before it even kicks in then maybe.

[PerfectStorm]

If yesterday's announcement is enough to make you go perm then your day rate isn't good enough.

[Louisa@InTouch]

Personal Service Company is not actually defined in law. However this is the company that would effectively sit between you and your end client.

Employment Intermediary is defined within law and a PSC would fall within this, with the provision of personal services.

Providing that you are not under SDC, you will still be able to make the claim for travel and subsistence.

The next speedbump, is going to be looking at the 'right' of SDC...

[tractor]

....

Personal Service Company is not actually defined in law. However this is the company that would effectively sit between you and your end client.

Employment Intermediary is defined within law and a PSC would fall within this, with the provision of personal services.

Providing that you are not under SDC, you will still be able to make the claim for travel and subsistence.

The next speedbump, is going to be looking at the 'right' of SDC...

I don't think there is a statutory definition of employment intermediary, only intermediary. This is wishful thinking on the part of HMRC, that along with PSC, if they repeat it often enough, it will become the accepted terminology. This appears to be the case for PSC.

But given that the consultation document on travel expenses says it will 'define employment intermediary', it would appear that there is no statutory definition for them to rely on at this time.

Indeed, I can find no statutory definition, if you have one available, please post or link it. It will be of interest to us all

[unixman]

What others have said. All that has happened is a modest tax increase, and that will be further offset by reductions on corp. tax and an increasing tax free allowance. The removal of expenses is still just conjecture.

Regarding PSC, agree with others. I never call my company a PSC and will correct anyone else who does it in writing. However, just noticed my contract is headed "Peronal Service Company Agreement". Grrr. Time to hire some staff. OP, I can offer you the new Living Wage of £7.60, if you can troubleshoot some SQL...

[tractor]

....

What others have said. All that has happened is a modest tax increase, and that will be further offset by reductions on corp. tax and an increasing tax free allowance. The removal of expenses is still just conjecture.

Regarding PSC, agree with others. I never call my company a PSC and will correct anyone else who does it in writing. However, just noticed my contract is headed "Peronal Service Company Agreement". Grrr. Time to hire some staff. OP, I can offer you the new Living Wage of £7.60, if you can troubleshoot some SQL...

Very soon CoOp Contractors will be the way to go. It's about time we started one.

[northernladuk]

Hopefully, as mentioned in another thread, this will scare all those that see contracting as more cash than permies to go scurrying back to perm and leave those that enjoy this model to get on with it

[SlipTheJab]

The permie market has gone nuts locally recently so much so that If I can get a role paying 80k+ come Feb/March next year then I am offski. This div tax is just the latest in a long line (and a line which will continue) of measures, 100k a yr contracting with no holiday/sick/training/pension/benefits or 80k perm, it's looking like a no brainer now...