Limited Company?

sunilsudera

I have been asked by the recruitment agency if i am going to take a job offer through a limited company of my own or through their PAYE.

I am in the financial sector so wont shy away from giving the limited company a go.

I just want to know what this entails exactly and how much extra work it would be for me to do this if someone could get back to me and tell me the in and outs it would be very much apreciated.

Notmyrealname

This is a ploy by the agency to get out of their obligations under the Agency Workers Rights act and paying employers NI. It also means that they don't have to pay holiday pay, bother with employment rights or any of that inconvenient legislation nonsense - they don't even have to pay you on time.

For that they'll usually reward you with an extra £1/hr over PAYE rates which barely even covers the holiday pay you won't be getting.

Also HMRC is looking into this "scam" as technically you do not meet HMRC tests for self employment, hence the agency want you to be Ltd and not Sole Trader.

Take it through PAYE. To do otherwise means you sign away all of your rights as en employee and they get away with it.

sunilsudera

Would it benificial to look at umbrella companies or shall I just tell the agency PAYE is definitley the way I would like to go!

System

Notmyrealname wrote: »

Also HMRC is looking into this "scam" as technically you do not meet HMRC tests for self employment, hence the agency want you to be Ltd and not Sole Trader.

It's not a scam, it is probably because the end client insists on dealing with a company rather than a sole trader.

This is the standard in the IT contracting world.

Take it through PAYE. To do otherwise means you sign away all of your rights as en employee and they get away with it.

You don't because you are an employee of your own company. You will probably be a director as well so things like NMW & AWR probably won't apply

agrinnall

I wouldn't necessarily look at it in quite as bad a light as notmyreal name paints, it really depends on two things: how much extra will you get for not going PAYE, and how long do you think you are likely to be in this job? If the extra pay is significantly more than PAYE (e.g. 30% or more, rather than the £1 ph at the other extreme) then it may be worth considering. And if it's short term anyway then your employment rights are minimal either way. And while it could be a "scam" there are plenty of contracts where it isn't, as long as you follow the rules (Google IR35) - I did it for 11 years with no problems, although that was as an IT contractor where the rates were double or more what an employee would get.