Agency worker- Not accepting Limited status AT ALL

MissXOnline

I'm "temping" via a recruitment agency. I want to go Limited or work via an Umbrella organisation, but my agency won't let me. By gaining Limited status I get a higher pay and get taxed less. Nearly every agency allows this to happen, but mine simply won't budge. They say this is because they like to do their own payroll using PAYE. But I think they're just being greedy. Is there a way round this?

Why they're being "greedy": The total invoice for my job is 23 pounds per hour, agency takes 13, I get 10.

What should I do? I urgently need everyone's advice.

The bottom line is: I *need* to go Limited and find a way to do it.

boobies

You do not need to go limited, endless agency workers do not. You want to go limited so you can be the greedy one rather than the agency. Yes? If you don't like it find a role with another agency.

bevanuk

The difference is that you do your own tax return, you don't get paid less - you get given the tax. The agency make the same profit margin regardless of your tax status. So what if they are making £10, you're making £13 - it's not greed it's business.
Agencies don't have to give you the option - if you had a permenant position it wouldn't be on the table.
It's as simple as above, go and get another job with a different agency. No other option really.

fedster

I agree with Boobies, you are being greedy, the Agency do not have to accept your request, just find another Agency to work for.

bevanuk

MissXOnline wrote: »

Erm, did you bother reading my post? How on god's word am I being greedy when I'm the one WHO WORKS?

In future, can you refrain from post crap like that?

You wouldn't be working if it wasn't for them. And with your attitude you won't have one for much longer anyway.

MissXOnline

I can't believe the people on here are defending agencies. They're greedy people who take your money. It's as simple as that. It's not even a fair, even amount. My mate was an agency worker and she received a good rate of 15 an hour. I can't even negotiate my rate.

Notmyrealname

MissXOnline wrote: »

I'm "temping" via a recruitment agency. I want to go Limited or work via an Umbrella organisation, but my agency won't let me. By gaining Limited status I get a higher pay and get taxed less. Nearly every agency allows this to happen, but mine simply won't budge. They say this is because they like to do their own payroll using PAYE. But I think they're just being greedy. Is there a way round this?

Why they're being "greedy": The total invoice for my job is 23 pounds per hour, agency takes 13, I get 10.

What should I do? I urgently need everyone's advice.

The bottom line is: I *need* to go Limited and find a way to do it.

They're not being greedy. IT costs about 26% more to employ someone in employers NI and holiday pay than their hourly rate on PAYE so that £13 profit is actually £10. Out of that they have an office to run which typically costs around £250k a year outside of London.

Agencies who accept Ltd do it to save themselves money as they'll pay you £1/hr more than PAYE but you won't get holiday pay and they don't have to pay employers NI but you do.

BUT THIS IS THE MOST IMPORTANT THING.

HMRC have a very strict set of rules regarding self employment. Your job does not meet them. The agency are working within the law unlike those doing Ltd. Google IR35 and you'll see what is likely to happen to all of these and the people doing what you want to do.

MissXOnline

Notmyrealname wrote:

The agency are working within the law unlike those doing Ltd. Google IR35 and you'll see what is likely to happen to all of these and the people doing what you want to do.

So are you saying people who are limited are not working within the law? I don't understand how this is?

Notmyrealname

MissXOnline wrote: »

I can't believe the people on here are defending agencies. They're greedy people who take your money. It's as simple as that. It's not even a fair, even amount. My mate was an agency worker and she received a good rate of 15 an hour. I can't even negotiate my rate.

Calculate the employers NI and holiday pay on your wage. Deduct it from what they make.

Next, calculate:

1) Office rent for a comparable office
2) Business rates.
3) Phone bill
4) Utility bills
5) 4-5 staff wages at £15-20k per annum.
6) Cost of running at least two company cars doing 30-40,000 miles per year for the sales team out visiting companies to get business.
7) Advertising.

And then work out just how many people they'd need to employ with the profit they're making to meet those bills.

Remember that even if you went Ltd, the agency would still charge the client the same rate. Don't like it? Then do what I did and go to companies direct yourself and cut out the agencies. The downside is you'll find that the companies who pay the best are on 60 day terms with monthly invoicing so you won't receive the money for your first weeks work until 3 months later. And when you finish that placement you'll have a week or more with no income whilst you try to find more work.

bevanuk

MissXOnline wrote: »

I can't believe the people on here are defending agencies. They're greedy people who take your money. It's as simple as that. It's not even a fair, even amount. My mate was an agency worker and she received a good rate of 15 an hour. I can't even negotiate my rate.

If you don't like them, don't use them.

I think the consensus on here is that nobody really 'likes' them, but they are a necessary evil and a valuable tool in finding a job.

Just because they are not liked doesn't mean everyone will have skewed opinion like you - that everything they do is wrong and immoral. Maybe your mate was doing a different job nothing is fixed.

They are there to make money off your back, and doing it well with that margin.

Notmyrealname

MissXOnline wrote: »

So are you saying people who are limited are not working within the law? I don't understand how this is?

Because the position does not meet the HMRC criteria for being self employed.

http://www.hmrc.gov.uk/employment-status/index.htm#1

To be self employed:

Can they hire someone to do the work or engage helpers at their own expense? - No you can't.
Do they risk their own money? No you don't.
Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves? No you don't.
Do they agree to do a job for a fixed price regardless of how long the job may take? No you don't.
Can they decide what work to do, how and when to do the work and where to provide the services? No you can't.
Do they regularly work for a number of different people?
Do they have to correct unsatisfactory work in their own time and at their own expense? No you don't.

You can only answer YES to one of those questions. You will be answering YES to all the below:

If the answer is 'Yes' to all of the following questions, then the worker is probably an employee:

Do they have to do the work themselves?
Can someone tell them at any time what to do, where to carry out the work or when and how to do it?
Can they work a set amount of hours?
Can someone move them from task to task?
Are they paid by the hour, week, or month?
Can they get overtime pay or bonus payment?

So you do not meet the criteria for being self employed. Setting up as Ltd is used as a way of getting round this but as the IT sector found - hence the mention of IR35 - if HMRC decide that this was done to get around the rules of self employment they'll decide it was invalid, bill the agency for the employers NI avoided and bill you for the tax and NI you avoided.

By gaining Limited status I get a higher pay and get taxed less.

Not necessarily. Agencies doing Ltd pay £1/hr more. You have £20 or so a week fee to the umbrella company whether you work an hour or a full week. You don't get holiday pay unless the umbrella company deduct it from your earnings and pay it later. You will have employers pay at 13.8% to pay on your earnings in addition to normal NI. AND YOU WILL HAVE NO RIGHTS AT ALL AS AN EMPLOYEE. AWR does not apply to S/E agency workers.

You can claim expenses but unless the expenses are at least 1/3 of your top line and you're earning in excess of £350 a week every week then Ltd/Umbrella isn't really worth it - This is what NOVA, an umbrella company for HGV drivers say.