What is a Personal Service Company (PSC)? A Personal Service Company or more commonly referred to as a PSC, is usually taken to mean a limited company, the sole or main shareholder of which is also its director, who, instead of working directly for clients, or taking up employment with other businesses, operated through their own company.  The contractor usually provides services as an individual or small group of individuals. HMRC have no legal definition for a PSC, which can be used to their advantage when carrying out tax investigations. The main benefit of setting up as a PSC is having the company finances completely separated from your own personal liabilities, this gives additional protection when running the business as well as being able to pay Corporation Tax and tax on dividends rather than paying full income tax and NICs on all profits exceeding a personal tax allowance. All companies set up as a PSC or Limited Company must be aware of the IR35 legislation. Is there a difference between being a PSC Contractor and a Sole Trader? The main difference between being a contractor who is set up as a PSC and a sole trader is the separated connection between the business and the individual. The PSC will be registered on Companies House. When set up as a PSC, the business is considered to be a completely separate legal entity from the worker themselves, this means that the owner/director of the PSC has limited liability and not personally liable for the companies debts. Whereas, a sole trader does not have a registered company on Companies house and will trade as an individual under a trading name of their choice. Unlike PSCs, sole traders and their business are seen as a single entity and are entirely responsible for the business and its finances.     Integra People cannot offer legal advice, tax advice or guidance for Personal Service Contractors, Limited Companies or Sole Traders. For more information please talk to a registered accountant or HMRC.