Newbie question Change of agency legal entity

[NotJustAnotherPM]

Hi,
My first post so please be gentle.
I am half way through an IT contract and the agency out of the blue has sent me an amended contract to sign that they want me to sign asap, its even dated Nov 2nd.
The only change is their legal entity. They want me now to sign up to a new company that they have created only a few months ago that has no assets and a basic credit rating (I checked).

The Agent tells me the reason is because they want to separate out their perm and contract activities into two companies.

I smell a rat, any thoughts ? Could this be IR35 related ?

[cojak]

This is a post-IR35 decision. From April next year if the umbrella screws up the payment to the contractor, the agency is actually liable for the tax due.

My guess is that they are looking to limit their liabilities.

[eek]

This is a post-IR35 decision. From April next year if the umbrella screws up the payment to the contractor, the agency is actually liable for the tax due.

My guess is that they are looking to limit their liabilities.

Which will be a nasty surprise to the end client when the liability ends up being passed to them.

Thanks to the OP for the tip off though - it shows how important the changes will be to the entire supply chain and it shows how much a lot of agencies don't trust any of the current compliance options.

Finally and again to the OP. Are you working inside IR35 or outside via your own limited company? If it's the former is your umbrella a compliant one - I would double check but posting the name here should be enough for us to tell you whether it's OK or not.

[NotJustAnotherPM]

Which will be a nasty surprise to the end client when the liability ends up being passed to them.

Thanks to the OP for the tip off though - it shows how important the changes will be to the entire supply chain and it shows how much a lot of agencies don't trust any of the current compliance options.

Finally and again to the OP. Are you working inside IR35 or outside via your own limited company? If it's the former is your umbrella a compliant one - I would double check but posting the name here should be enough for us to tell you whether it's OK or not.

The agency currently has no ability to deal with PAYE, they do umbrella or outside. My guess is live they want out next March. The client will probably bulk assess and i'm self assessed as outside

[cojak]

The agency currently has no ability to deal with PAYE, they do umbrella or outside. My guess is live they want out next March. The client will probably bulk assess and i'm self assessed as outside

Then you may want to read this: IR35 Planning for April 2021 - Should I stay or should I go?

[NotJustAnotherPM]

Then you may want to read this: IR35 Planning for April 2021 - Should I stay or should I go?

Yep, pretty clear i need to walk in March. Just deciding whether this agency change is my nudge to go now. Problem is the market is not great at the mo