The old erroneous argument again
Or is it "the old prejudiced argument again"?
"where workers behave as employees but avoid paying regular income tax and National Insurance contributions by billing for their services through PSCs, which are taxed at lower corporate rates."
Once and for all, let's get this straight.
Income received by a "personal service company" (a class of business that doesn't actually have any statutory definition by the way), as that of any other limited company, is not available tax free to be rifled by its directors. The "lower corporate rates" alluded to only apply to company profits that remain after payment of the contractor's salary and other business expenses.
A limited company contractor is employed by their own company and receives a salary on which income tax and national insurance are duly paid. The company also pays employer's national insurance contributions for its employee (the contractor). Any profit left over in the company after these costs and legitimate business expenses is subject to corporation tax. Consequently, all else being equal, the contractor's limited company pays more tax overall than the contractor would have done if employed directly by an end client (i..e. some of the tax burden is transferred from the end client to the contractor's own company).
The only "tax breaks" available to the limited company contractor are business expenses paid out of personal income (which would otherwise be refunded, and claimed back against tax, by their client) and apportioning remuneration between salary and dividend, which is practiced almost universally by directors of limited companies not classed by HMRC as "personal service companies". These are facts.
So, unless fraudulent activity is present, the only real difference is who pays HMRC. There are plenty of mechanisms for dealing with fraudulent activity, despite which HMRC seems to turn a blind eye to a lot of it, particularly on the part of larger enterprises (just read any issue of Private Eye).