Query on IR35 / PAYE and Recruitment agency .....Help needed Query on IR35 / PAYE and Recruitment agency .....Help needed
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  1. #1

    Nervous Newbie

    samuna has no reputation

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    Jun 2020

    Default Query on IR35 / PAYE and Recruitment agency .....Help needed

    Hope someone might be able to help with the following question. Successful secure a contract job for 12 months which was initially suppose to be paid at a hourly rate of £50. Now the recruitment agency has informed me the company concerned want to be IR35 compliant for the future, and I will now have to do the job through PAYE of the recruitment agency, and as a result I will be paid hourly rate £40.00

    Q1 Can an agency force potential contractor to do this?
    Q2 If you are force to do PAYE, can you ask / negotiate how much the agency are make off you?

  2. #2

    Permie Swiss (pending)

    NotAllThere is always on top

    NotAllThere's Avatar
    Join Date
    Aug 2007
    Far away from HMRC


    Talk to the agency and ask what that extra £10 you're not getting covers.

    Q1. No. You can always refuse. Have you signed any contract yet?
    Q2. Everything's negotiable
    Down with racism. Long live miscegenation!

  3. #3

    My post count is Majestic

    northernladuk has reached the peak. Play again?

    northernladuk's Avatar
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    Mar 2009


    When you say secured, did you sign a contract. Has all this happened before you sign or after you signed?
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  4. #4

    Should post faster

    mjcp is a permanent contractor

    Join Date
    Apr 2017
    Home countyshire



    Agency advertise role to "contractor" types. Lists role with "contractor" type remuneration (you know, a gross figure that you wont actually take home, because your PSC pays CT, NI, ENI etc etc etc).

    But to be IR35 compliant* end client and agent require you to use a brolly of some description. Agent thinks: "I can have that brolly fee for myself" and sets up a payroll function.

    Net result is you get an employment contract with a daily / hourly figure well below the one advertised. They will have taken out 12.7% (or more) to accrue for holiday pay, 0.5% for App levy, employer's NI (but it will be listed as something else if you ask why), pension? etc.

    I have seen one where ~500 per day ended up at ~400 per day on the employment contract. Net figures in the bank would have been very similar to a brolly arrangement, so no real issues in real terms.

    But... arguably, its a bait and switch that should be listed as the real rate in the 1st place or simply as £XX(X)k p.a. PAYE - would avoid exactly this discussion!


    *Again, broadly, we know you can be compliant through your own PSC, but the end clients and agencies refuse to entertain the idea...

  5. #5

    Prof Cunning @ Oxford Uni

    WTFH has reached the peak. Play again?

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    Nov 2012


    OK, can you tell us:
    Was £50 the figure going to your LTD, before CT, NI, and tax?
    Is £40 the figure going into your personal bank account after NI & tax?

    If so, bite their hand off for it.
    I'm perfect, in a very specific and limited way.
    Hands... out infractions
    Face... the music
    Space... between the ears

  6. #6

    Fingers like lightning

    elsergiovolador is a permanent contractor

    Join Date
    Apr 2020


    It's happening. Companies are going crazy and don't want to be on the hook for fines even if they are above the board with everything and HMRC still could say they could have taken someone inside IR35 and the arrangement is fake (according to their own guidance).

    Everything is negotiable and you should read your contract carefully. Does it say anything about this?

    If you go from being outside to inside, you transform from a business into a disguised employee. If this is in private sector then such transition could raise eyebrows and potentially trigger an investigation, as until next year you are still on the hook, not the client.

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