Recruitment agent non payment
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  1. #11

    Old Greg is my bitch's bitch

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    Further thought - worth a quick conversation with Safe Collections (posts here sometimes and offers good advice) to see whether they see any chance of recovery, either from Director personally for wrongful trading or fro the new associated company (can't see it myself). Would be interesting to know whether the new company has taken any IP from the old company (database of CVs etc.). Could be worth going to the Information Commissioner about this. All stuff principally to make yourself feel better rather than any prospect of recovery, I fear.
    Where there's muck there's brass.

  2. #12

    Contractor Among Contractors

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    Quote Originally Posted by SueEllen View Post

    BTW going for the nuclear option e.g. winding up orders rarely works you need to keep the company running to get your money. In future use a debt collector and maybe put a charge against them so when people credit check them realise they are a poor risk.
    I think I'm correct in saying that a winding order will only work if the company is insolvent. If that's the case then there is nothing to be gained.
    Likewise if they are insolvent then a debt collector won't be much use either.

    To the OP - a lot of other posters on here do due diligence on the agencies. This is worthwhile and not too costly (free if you just use companies house information). An agency is likely to have high turnover so unless they are doing millions a year then consider them high-risk. Most of the money going through them is passed to the contractor so it's a high risk business for small agencies. One customer refuses to pay and they can go under very quickly. It's why timesheets are so important (not just for the contractor) as it's the evidence of monies owed.

  3. #13

    I live on CUK

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    Quote Originally Posted by Lance View Post
    I think I'm correct in saying that a winding order will only work if the company is insolvent. If that's the case then there is nothing to be gained.
    Likewise if they are insolvent then a debt collector won't be much use either.
    Yep.

    One reason to use a debt collector is they don't get paid until you do so if the debt is unrecoverable they won't bother trying to chase it and will inform you of this.
    "You’re just a bad memory who doesn’t know when to go away" JR

  4. #14

    Fingers like lightning


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    If one of us had a Limited Company, wound it up and started another company carrying out the same trade, purely to gain a tax advantage, then HMRC would come after us.

    So perhaps the law should be changed - if you wind up a company and start a second company in substantially the same business area, then liabilities incurred by the first company could be transferred to the second company. Whether tax liabilities or unpaid debts. Phoenixing to avoid paying people should be FAR more difficult.

  5. #15

    TripleIronDad

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    As agency did not pay, contract broken, and you are free to go direct with the client.

    With a nice rate increase.

    Sounds like a huge win to me.
    I keep pushing forwards but they keep pushing me backwards. So I have new rules. 1. Don't feed the trolls you know they have no souls. 2. Don't respond to them they'll only post back back again. 3. Don't be their friend they'll only knife you in the back. I have new rules I count them.

  6. #16

    Contractor Among Contractors

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    Quote Originally Posted by chopper View Post
    If one of us had a Limited Company, wound it up and started another company carrying out the same trade, purely to gain a tax advantage, then HMRC would come after us.

    So perhaps the law should be changed - if you wind up a company and start a second company in substantially the same business area, then liabilities incurred by the first company could be transferred to the second company. Whether tax liabilities or unpaid debts. Phoenixing to avoid paying people should be FAR more difficult.
    If 'one of us' did it to avoid tax then the taxman would come after your illegally declared dividends.

    Whilst I agree that it is too easy to Phoenix a company I'm not sure that more legislation is the best way. How about if Companies House actually investigated more? The main problem I think is that administrators are appointed by the company officials, meaning that administrators who get directors' struck off regularly would struggle to get any new business.

    Only when rich people are ripped off, or HMRC, do directors get really penalised.

    IMO / IANAL

  7. #17

    Old Greg is my bitch's bitch

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    Quote Originally Posted by Lance View Post
    If 'one of us' did it to avoid tax then the taxman would come after your illegally declared dividends.

    Whilst I agree that it is too easy to Phoenix a company I'm not sure that more legislation is the best way. How about if Companies House actually investigated more? The main problem I think is that administrators are appointed by the company officials, meaning that administrators who get directors' struck off regularly would struggle to get any new business.

    Only when rich people are ripped off, or HMRC, do directors get really penalised.

    IMO / IANAL
    Worth looking at http://en.wikipedia.org/wiki/Wrongful_trading

    If the Director was taking salary of divis...

    past the point when they:
    "knew, or ought to have concluded that there was no reasonable prospect of avoiding insolvent liquidation"; and
    they did not take "every step with a view to minimising the potential loss to the company’s creditors".
    ...then they may be personally liable and could be disqualified. Not sure how this works in practice, but a complaint may annoy and embarrass the Director.
    Where there's muck there's brass.

  8. #18

    Contractor Among Contractors

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    Quote Originally Posted by northernladyuk View Post
    Worth looking at http://en.wikipedia.org/wiki/Wrongful_trading

    If the Director was taking salary of divis...



    ...then they may be personally liable and could be disqualified. Not sure how this works in practice, but a complaint may annoy and embarrass the Director.
    I think the way it works in practise is that the company has lots of costs (other salaries, rent etc.). So the time between it looking bad, and it going insolvent is quite a small period. The director pays back the last few months of salary/divis to show willing (ignoring the far larger historical amounts when the company was doing OK) and teh company goes bust anyway.
    A one-man contractor company doesn't have those large expenses so there's no excuse.

    I'm not trying to justify bad business practise but that is how I believe it works, and why we'd never get away with it.
    It's all about plausible deniability. And a larger business has more flexibility (just look at what can be got away with as far as expenses go if you run a proper business?)

  9. #19

    Nervous Newbie


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    I am since found out that the company who they formed was formed last year and they were running it as a recruitment company in parallel while they were letting the other company fail as they were posting job adverts.
    Surely that has to be illegal?

  10. #20
    eek
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    bored now

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    Quote Originally Posted by pagrate View Post
    I am since found out that the company who they formed was formed last year and they were running it as a recruitment company in parallel while they were letting the other company fail as they were posting job adverts.
    Surely that has to be illegal?
    No....
    merely at clientco for the entertainment

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