Electric Trainer

Self-employment and personal service companies

I get a lot of questions on my self-employment training courses about the mysterious personal service company (PSC). Most people have heard the term in connection with working for yourself, but are confused about what it means. As I mostly work with people going freelance it's a very relevant issue.

This update from the CIPD provides a nice overview. The legislation around PSCs (IR35) is so opaque that there are constant rumours that it will be changed/clarified/abolished. Now the Office of Tax Simplification are trying to make things, er... simpler. They might also put the onus on the work provider (client or employer) to define whether the job is legitimately one that can be paid gross, or whether the worker has to be paid PAYE through the payroll.

http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2015/09/04/employers-may-have-to-decide-tax-status-of-personal-service-company-workers.aspx

Getting tax back

I meet quite a few people on business skills courses who have been through a redundancy process and are receiving a payout as a result. 

Redundancy payments greater than £30,000 are taxed at source, so I'm often asked how you get the tax back if you've been taxed too much for that financial year.

I'm no tax advisor, but this link might help:
www.gov.uk/claim-tax-refund/youve-stopped-work

It's part of the new-look GOV.UK site, where HMRC has been migrating lots of useful guidance.

A few years ago I also ranted slightly about a related issue.