This term is used to define self-employed people who run their business for themselves and take full responsibility for its success or failure. Unlike working through a personal service company (PSC), there is no separation in law between the worker, and the business. This means that if anyone decided to start legal proceedings regarding the work done, this case would be brought against the individual, in contrast to a worker who uses a PSC, where it would normally be the company facing the court case, instead of the worker personally.
A self-employed person has no statutory employment rights and will not ordinarily pay tax to HMRC until the end of the tax year, although some types of National Insurance may be payable during the year.
