Contractors' Questions: Can I cut out the agency and go direct?

Contractor’s Question: I used to work on behalf of a company through a recruitment agency for a few months at a time. On the eve of the contract finishing, the contract would be extended for another period. Then my work for the company (via the agency) all but stopped, as the company lost a few major clients.

But I now hear that the company might get busy again soon, so how long would I need to completely stop supplying them through the agency, in order that I could compliantly freelance for them on a direct-to-client basis? I imagine there could be contractual issues, perhaps extending to IR35?

Expert’s Answer: It appears that you, the contractor, would need to look at the terms of your contract with the employment business and, in particular, whether those terms preclude you – ‘the supplier’ - from working directly for the agency’s client for a certain period of time.

Some contracts may specify a period of time, or may include a commercial payment to be made to the agency by the client, in the event that the contractor is engaged directly. If you, as the supplier, are taken on directly, the paperwork and written contract would need to properly reflect the working arrangements with the client company for IR35 purposes.

The expert was John Hill, co-founder of employment status advisory John Hill & Associates.

Editor's Note: Further Reading -

Contractors' Questions: Can I work direct for my agent's client?

Contractors' Questions: Can a 2-week gap beat IR35?

Thursday 25th Jul 2013
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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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