Inside IR35 contract - holiday pay

Macca72

I have been working as a contractor through my PSC for a large engineering company. Due to IR35, I will now be have to pay full PAYE/NI through the agency I have been working through.

My agent has sent me a new contract where it stipulates that my hourly rate is essentially being lowered to pay for a number of paid holidays.
I know that the net wage will end up being the same but this seems like they are being devious to get around the fact that I will now be an employee without any appropriate benefits / rights associated.

Is my agent permitted to do this?

JohnDorian

They can do this however the umbrella companies I have used in the past have allowed me to take holiday pay as I go along , i.e., I get paid my full day rate less PAYE, ERNI and umbrella company charge but the holiday pay is listed separately on each payslip. Maybe worth investigating if you can do this or if the agency has alternative providers that do offer this.

On a side note - you are brave for going from outside to inside with the same client. HMRC have just begun investigating contractors that did the same when the rules changed for the public sector back in 2017.