Help - My Agency are forcing me to go Umbrella from Ltd Company can they do this??

[llcooljatt]

Hi

Due to the AWR legislation coming out 01/10/11 they have said to all ltd company peeps to go via an Umbrella company, my question is can they do this when I have previously demonstrated I'm outside IR35 and them letting me be Ltd in the first place, legally can they do this?

Here's their email:

Hi,

As per conversation due to the new Agency Worker Regulation we cannot proceed with your existing Ltd Company set up.

The following 3 Umbrella’s fall under the new Agency Worker Regulation which you need to choose and inform us of which you will be proceeding with.

Approved Umbrella Companies;

Parasol
Parasol - Umbrella Companies | UK's favourite PAYE umbrella company
Tel : 0800 840 7212

Contractor Umbrella
PAYE Umbrella Company : Contractor Umbrella Home : Umbrella Companies
Tel : 01206 713 680

Paystream
www.paystream.co.uk
Tel : 0800 197 6516


Please advise which one you will be going with.


madmad

[malvolio]

Hi

Due to the AWR legislation coming out 01/10/11 they have said to all ltd company peeps to go via an Umbrella company, my question is can they do this when I have previously demonstrated I'm outside IR35 and them letting me be Ltd in the first place, legally can they do this?

Here's their email:

Hi,

As per conversation due to the new Agency Worker Regulation we cannot proceed with your existing Ltd Company set up.

The following 3 Umbrella’s fall under the new Agency Worker Regulation which you need to choose and inform us of which you will be proceeding with.

Approved Umbrella Companies;

Parasol
Parasol - Umbrella Companies | UK's favourite PAYE umbrella company
Tel : 0800 840 7212

Contractor Umbrella
PAYE Umbrella Company : Contractor Umbrella Home : Umbrella Companies
Tel : 01206 713 680

Paystream
www.paystream.co.uk
Tel : 0800 197 6516


Please advise which one you will be going with.


madmad

They're talking bollix. For one thing LtdCo contractors are out of scope of the AWR.

Take a look at this web page - Agency Workers Regulations | PCG - download the guide and send it to them with a suggestion they read it properly. And tell them it's not up to them how you structure your business. And it's nothiing to do with IR35 either, come to that.

I'll pass this up the tree as well. It's the kind of thing I was expecting to happen.

[cojak]

What's the name of the agency?

[llcooljatt]

What's the name of the agency?

Hi thanks for the reply guys I'm really worried about this, there Allegis Group head office is in Reading are they trying to scare monger me then?

[llcooljatt]

They're talking bollix. For one thing LtdCo contractors are out of scope of the AWR.

Take a look at this web page - Agency Workers Regulations | PCG - download the guide and send it to them with a suggestion they read it properly. And tell them it's not up to them how you structure your business. And it's nothiing to do with IR35 either, come to that.

I'll pass this up the tree as well. It's the kind of thing I was expecting to happen.

Hi thanks for the reply guys I'm really worried about this, there Allegis Group head office is in Reading are they trying to scare monger me then?

[cojak]

Yes they are.

Read the link that Malvolio posted and send the link to them.

The new regulations mean that Ltd's are excluded from it.

[Wanderer]

The new regulations mean that Ltd's are excluded from it.

LtdCo contractors are out of scope of the AWR.

I hate to disagree with our esteemed contributors but according to the guidelines from Department of Business and Innovation Skills it's not automatically so: "Simply putting earnings through a limited company would not in itself put individuals beyond the possible scope of the Regulations".

Of course if you are "genuinely in business of your own account" then you are OK and every IR35 dodger out there wants to be in that camp. However, the tests for being "in business" are as as clear as mud, just like the IR35 tests. So how could the agency ever assess this? Another stupid bit of employment legislation.

So, why would an agency refuse to deal with a Limited company? By mandating that people use a pre-approved AWR compliant umbrella, the AWR regulations are dealt with from the agency's point of view and they can wash their hands of the problem by shifting the risk and compliance efforts onto the umbrella. If they allow a worker to use an LTD then they will live in fear of a (possibly retrospective) claim for employment rights under the AWR in the same way as contractors fear an IR35 investigation.

Perhaps this is what the government sees as a positive outcome - contractors will be directed away from incorporation as a LTD and towards Umbrella solutions. A big win for the government because regulation of a relatively small number of umbrella companies is a lot easier than investigating many thousands of 1 man LTD companies....

[malvolio]

Very possibly true, excpet that I have seen the discussions with DBERR about the implementation of the AWR and despite the gold-plated caveats in the legislation, the intention has always been that Ltd Co contractors are out of scope. But we won't know until it goes to court.

Someone is pancking here anyway, probably Allegis, more likely the end client. Seven working days to completely restructure a range of contracts doesn't sound like forward planning to me.

[blacjac]

Serious Question.

Could you not use this as an opportunity to cut out the agent and go direct?

If the agency are refusing to work with your limited company, is it not them who are preventing the working relationship from happening, therefore there is no losses to them if you tell them to sod off and go direct....?

[malvolio]

Serious Question.

Could you not use this as an opportunity to cut out the agent and go direct?

If the agency are refusing to work with your limited company, is it not them who are preventing the working relationship from happening, therefore there is no losses to them if you tell them to sod off and go direct....?

You might, but it rather depends what contract Alllergies has with the end client and what it says about rehiring (or what the client has to pay Allergies if that's what they do). That might block you rather more effectively: also, if the client won't do Direct (many won't) but wants an agency in the loop, then they will be looking at paying twice for the same service for a period of time; that's unlikely to go down very well, so much more likely they just take another contractor within the existing Allegis agreement.

Ulitmately the whole thing is a crock of ordure. There is infintely less risk from using a Ltd Co contractor under AWR than there is using an umbrella contractor. And since the brollied one is in scope of the AWR, you would have to replace them every 11 weeks to forestall that risk completely. In other words, go from a safe, stable engagement to an unsafe, unstable one. Brilliant.