Personal service companies or employment?

KEY POINTS

• The apparent monetary attractions of an intermediary company.
• If the personal service company legislation applies the worker is assumed to have received a salary.
• The legislation applies if the worker would be treated as an employee of the client company if not for the intermediary.
• Some deductions can be taken into account when calculating the deemed salary.
• Secondary Class 1 National Insurance contributions become the liability of the intermediary company.
• The question of whether there is an employee/employer relationship needs careful consideration.

After a busy week teaching I was looking forward to a quiet drink and catch-up with – my nephew; let’s call him David. He arrived quite excited because having worked as an employee for many years he had just agreed with...