The team have run their own Personal Service Companies (PSC) multiple times, worked via Umbrella and PAYE payroll for firms and as permanent members of staff, so can speak first hand about the pros and cons of the various employment options available to you. Yes, you may find that Employment Agencies or Accountants encourage you to still run your own PSC, but if you are taxed in the UK then this really makes very little sense if you are assessed to be within IR35 and it is your sole contract.

As can been concluded from this table, it is not advantageous to provide services via a Personal Service Company (PSC) if your contract is within IR35. Even if outside of IR35 the benefits of paying most of your salary via a Dividend has been pretty much eroded away by changes introduced by HMRC. In addition, even HMRC's own tool (CEST) to determine employment status cannot be relied upon to provide a definitive decision on whether you are deemed inside IR35 or outside IR35. This could prove to be a very expensive mistake.


Running a PSC incurs the following costs and valuable non-chargeable time that would not be required if working as a permanent employee or via an Umbrella/PAYE firm.

  • Monthly Accountant cost circa £150 GBP.

  • Monthly Professional Indemnity Insurance circa £75 GBP.

  • Quarterly Value Added Tax (VAT) submission to HMRC.

  • Monthly Business Bank Account charges.

  • Employees and Employees National Insurance.

  • An estimated (by HMRC) tax payment to be paid 6 months in advance; if outside of IR35

  • Inputting and tracking of business expenses; expenses cannot exceed 10% if inside IR35

  • Annual Company returns.

  • Personal Tax return.

* Benefit Provided by Employer

For Personal Service Company (PSC) contractors, the Employer for this purpose is the hiring Employment Agency and/or Client/Investment Bank. As the Director of the PSC you could of course choose to provide company benefits to match a permanent employee but these would be taken out of the contract rate paid to you by the hiring firm and not in addition.