Agent requests indemnity

[outsidein]

Hi!

This is my first post, so if this is the wrong forum I apologise in advance

Right, that out the way, here's my problem...

The agent my company is paid through is demanding a _personal_ indemnity from all the directors of my company.

They claim this is to mirror the false-self-employment responsibilities on their directors due to the very recent false self-employment regulations

Looking at how liberal the wording is (any and all tax liabilities at any point in the past and future kind of stuff) I'm less than keen to sign it

To help focus the mind they insist that if the indemnity is not signed, the April payment "might be affected".
So, basically, unless the indemnity is signed, they will hold back monies.

I have so many questions:
Is this agency alone in this request?
Is this an acceptable (whats the point of a Ltd company if the liability is not limited)?
Can they really change the way the payments are made mid contract?

But, for now, I really just want to know what the rest of the market is experiencing.
Are the rest of you getting these requests?

Cheers!

[cojak]

Do you work for a dodgy EBT loan scheme umbrella company? That's what this false self-employment legislation hits and if you do I don't know and so can't give you an answer to your question.

If you work through your own Ltd then the agency and agent are showing themselves up for the incompetent bunch of arses they are, because it has NOTHING to do with Ltds.

I would point them to the HMRC website and explain this to them. If they insist I would drop the contract there and then.

And I'd love to know the name of the agency...

[outsidein]

I'm very relieved that my interpretation of the request is mirrored by you.

I am unsure about naming the agency as I do not want to compromise any goodwill I can salvage from this situation.

So you can better understand my problem...

This is the main reason they provide:

In order to ensure full compliance with the legislation effective 6th April 2014, we now need to
undertake appropriate due diligence to confirm that all Suppliers of Services are operating
(and will continue to operate) as a Personal Service Company. Without this confirmation,
<AgentCo> must apply PAYE on all payments made after 6th April 2014.

(I have no idea how much they will retain for 'PAYE', nor where they intend to save it or how they plan to pay it to HMRC)

...this is the persuasion:

In order to ensure full compliance with the legislation effective 6th April 2014, we now need to
undertake appropriate due diligence to confirm that all Suppliers of Services are operating
(and will continue to operate) as a Personal Service Company. Without this confirmation,
<AgentCo> must apply PAYE on all payments made after 6th April 2014.
As part of this due diligence can you now please arrange for the attached undertaking to
be completed on behalf of <MyCo> Limited and signed by all Directors. One of the signatories
must be the Director and Majority Shareholder who is designated to perform the Services. To
ensure no delays to payments in April the completed Undertaking should be returned by 14th
April 2014.

(So i need to make my decision on this within 2 weeks - I'm not interested in doing so and I have no idea why I must be a majority shareholder)

...this is the clause in the indemnity (there are 5 in all, this 'subtle' one is the 4th) that concerns me the most:

The Supplier and the individual Directors personally jointly and severally indemnify
(and will continue to keep indemnified) both <AgentCo> and its Directors against any
claims by HMRC or any government body or fiscal authority for any sums required to
be paid in connection with the fees paid by <AgentCo> to the Supplier for the provision of
the Services. This includes any PAYE, Income Tax, National Insurance Contributions
and any other taxes or levies or penalties.

(The highlighting is theirs)

(The other clauses try to dictate the setup of the company and where the company's monies flow)

Thanks again for your positive feedback - it helps me a lot!

All advice appreciated - please keep it coming - I think I have quite a battle on my hands this week.

[stek]

I'd bin it.

[cojak]

Oh Dear....

Are you working for a Public Sector client? See here if you are...

http://forums.contractoruk.com/busin...ntracting.html

[Jubber]

I'd bin it.

+1

[TheFaQQer]

Don't walk away. Run. Run away as fast as you can.

[Andy Hallett]

Would be interested to see how they could go about actually deducting PAYE. First off they would surely need your tax code / NI Number and all the other things you don't bother to collect when you a dealing with a PSC in a B2B relationship.

I am sure others on here are more rounded on where this could lead, but ultimately this could lead to all sorts of deemed employment issues.

Another perfect example of an agency in a panic when they don't understand the issue [prays that my compliance department hasn't sent this out]

[eek]

Another perfect example of an agency in a panic when they don't understand the issue [prays that my compliance department hasn't sent this out]

Don't know how to break it to you but.......

[Andy Hallett]

Don't know how to break it to you but you are the only one that generally gets these concepts

FTFY