Tax system creates abuse of Personal Services Companies

'Confusion and complexity' in the tax system is driving the increase in the numbers of individuals opting to be employed via Personal Services Companies (PSCs), witnesses told the House of Lords during an evidence session last month, which is part of an inquiry into the use of PSCs and the tax issues they raise.

The Lords' select committee, chaired by Baroness Noakes, is looking at the extent to which PSCs are being used, and the efficiency in tax collection based on the rules around their use.