I’m currently working for a small family run firm through an agency. I’ve been asked to maybe cut the agency out, an go through them.
I was asked about a full time position but turned it down as I would take a pay cut so didn’t see it as worthwhile.
So it was proposed that they can hire me through my own ltd company.
Is there anything you would point out, make clear going through this process. Obviously payment terms. Anything else?
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I started working for myself through an agency, and thought cutting out the middle man ie the agency was the way ahead, I left my details with different jobs I’d been on and waited for the work to come, which it did.
Everything was going ok till I got back to the client one day to do a trailer swap, stepped out of the truck and some of the agency I’d been registered with were there.
Seems poaching work from an agent isn’t allowed in the clients contract.
Yea I understand that they’ll have a contract with the agency.
But it won’t be me that will have broken said contract, so that lies with the firm, surely?
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Jmarks1227:
Is there anything you would point out, make clear going through this process. Obviously payment terms. Anything else?
Yes, it’s illegal.
Working solely for a company under the guise of being “self employed” isn’t legal. You need to speak to a competent accountant who’ll explain to you the loopholes that you can exploit and the risks should you wish to proceed down this path.
harrawaffa:
Jmarks1227:
Is there anything you would point out, make clear going through this process. Obviously payment terms. Anything else?Yes, it’s illegal.
Working solely for a company under the guise of being “self employed” isn’t legal. You need to speak to a competent accountant who’ll explain to you the loopholes that you can exploit and the risks should you wish to proceed down this path.
LOL! It isn’t illegal!
HMRC have tax legislation called IR35 which makes this sort of thing illegal.
IR35 is tax legislation that is designed to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used.
Such workers are called ‘disguised employees’ by Her Majesty’s Revenue and Customs (HMRC). If caught by IR35, they have to pay income tax and National Insurance Contributions (NICs) as if they were employed.
contractorcalculator.co.uk/ … _ir35.aspx
You need to go on the payroll of the client to be legal so that the correct amount of income tax, national insurance, and pension contributions are deducted from your income before you get it.
Essentially depends whether HMRC class it as avoidance or evasion. This explains what is what but the bottom bot would be an issue in this case as the “employer” could be held liable if IR35 is determined.
skillcast.com/blog/tax-avoi … difference
Its doable, but remember there are a lot of things you can lose beyond tax if you go LTD with them, lile holiday pay and sickness benefits. Plus pension contributions later on in life from not paying enough nat ins.
Jmarks1227:
I’m currently working for a small family run firm through an agency. I’ve been asked to maybe cut the agency out, an go through them.
I was asked about a full time position but turned it down as I would take a pay cut so didn’t see it as worthwhile.
So it was proposed that they can hire me through my own ltd company.Is there anything you would point out, make clear going through this process. Obviously payment terms. Anything else?
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So why not stay with agency?
Jimmy McNulty:
Jmarks1227:
So why not stay with agency?
It was suggested by one of the loaders to try get me to work more full time for them. An the company arnt best pleased paying agency rates. So they wanna save money an get a regular driver in rather than agency.
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Simple answer is for them to advertise the job to you alone and you apply.
If you work thru an agency there is an introduction fee, which I have seen is 17.5% of the salary you would get full time on agency PAID rates, the company will have to pay that or be taken to court for breach of contract. If you are PAYE, the AGY are properly charging £16-18phr to the company and cover the NI/Tax/Pension (Employers pay Tax and NI on you).
You can be self-employed and take care of your own invoices etc, BUT you cannot work as a PSC (Personal Services Company) without paying the same NI/Tax as a normal worker, this stops you taking advantage of the LEGAL operation of an Ltd Company where you pay yourself peanuts and take the rest of the profit as dividends monthly without paying much tax and NO NI on that income, which is totally legal. IR35 is the HMRC trying to crack down on contractors e.g. Computer programmers working for Barclays were earning £450 per hr and not paying much tax and no NI on that income! Nice money right! HMRC wasn’t happy, so they brought up IR35 to knock it down, but this is the thing the HMRC don’t even understand it! complex and potentially financially disastrous for anyone falling foul of it. I worked as a contractor and paid for everything, including VAT and Corporation Tax with my Limited Company.
It may sound lucrative, but there are many downsides to it. My advice is that If you don’t know about accounts - DONT go LTD! YET! You will find yourself in the brown stuff quickly without basic knowledge, remember that accountants and HMRC are there to keep each other employed! They make it difficult for you to do anything yourself. If your accountant ■■■■■ up your return to the HMRC - it is you that signed it and you’re the one in court! He whistles away still charging you monthly - I’ve seen it!
If you want to go limited and feel safe with that company, go with an Umbrella company initially until you understand business. It is a complex minefield and when you invoice people and they don’t pay it on time, can you survive? Companies hold back money till the red letter arrives then it will cost you the same amount to get the original money from them. You need a ‘war chest’ which is a cash amount you cannot spend that will cover your living expenses for 3 months in case something like this happens.
You have no security either having all your eggs in one basket. You have no holiday pay. No fallbacks. It is a very risky move but always have a backup plan.
I wish you luck mate.
I worked as a contractor for several years and it’s hard work. If any owner/operators are on this site be more directed by them.
carlston49:
HMRC have tax legislation called IR35 which makes this sort of thing illegal.
Just to be clear, it isn’t illegal, it’s just that, as you say, if you’re deemed to be inside IR35 then the NI and income tax need to be paid as if you were an employee.
Jmarks1227:
Jimmy McNulty:
Jmarks1227:
So why not stay with agency?
It was suggested by one of the loaders to try get me to work more full time for them. An the company arnt best pleased paying agency rates. So they wanna save money an get a regular driver in rather than agency.
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Right but there is nothing in it for you, only for them, from what you are saying.
So stick with the agency who can still put you into there or elsewhere until you find a job that meets your needs
Quite possibly the easiest way to stay. I’ve got security working through the agency without worrying about anything else.
I’m reluctant to take a full time job with this company as it’s not somewhere I see myself staying long term. More just a passing point.
Why change if nothing actually benefits me
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