Personal Service Company

What is a personal service company?

A personal service company (PSC) is a separate legal entity engaged by film and TV productions to provide the services of an individual. Film and TV industry professionals in Ireland will commonly operate through a personal service company.

A recent Supreme Court ruling in Ireland has significantly reduced the bar for what can trigger an employment relationship between contractors and film and TV productions in Ireland. Therefore, a significant number of sole traders operating in the industry are considering whether incorporating a PSC is the right option for them.

Benefits of a personal service company

• Enables engagement on productions in a clear contractor capacity with the individual being an employee of their PSC rather than the production.
• A PSC is a separate legal entity from the individual shareholder whose liability for claims by third parties is limited to their direct investment in the company (which will generally be nominal).
• There are beneficial personal, pension and retirement planning options available in a PSC which are not available to sole traders.
• The corporate ‘trading’ tax rate in Ireland is 12.5% allowing profits of the PSC to accumulate at a lower up front tax rate. If all income is extracted from the business through salary, then no corporation tax should arise.

Disadvantages of incorporating a personal service company

• Additional administrative requirements (and related costs) including the preparation of annual financial statements, tax compliance requirements, and Companies Registration Office (CRO) obligations.
• Carried tax losses of an existing sole trader cannot be transferred to the PSC.
• Care is needed where assets are transferred from the sole trade to a PSC to avoid triggering tax costs inadvertently.

At Saffery, we have extensive experience advising professionals in the film and TV industry on the incorporation of personal service companies. Please reach out to us to find out how our award-winning team of experts can assist you.

The above should be considered general guidance and not tax or legal advice. Every individual’s case and needs are different, and we would suggest professional advice is always sought when restructuring your business.