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How did it come to this...

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    How did it come to this...

    Hi everyone and thanks for your comments on my previous thread below.

    Having worked through my own Ltd co. for two years and now (for my own reasons) wanting to work through an umbrella company, am I classed as a Ltd company contractor?

    Anyway, I have a nice new contract lined up, I have agreed the start date with client, the umbrella and financials are all in place and oh, what's this? (excerpt from agency email)....

    "Ok moving forward as you are the first contractor to opt in at <company name>, we will have to draw up appropriate contracts, basically both legal department will have to work on these, which may delay your start date. Until we get a contract in place we cannot make payments to <umbrella company> or technically have you on site. Please be aware of this. Additionally when you eventually do start your own limited company you will almost certainly fall under the IR35 rules."

    In addition to this, I have just taken a call from the agency basically stating that the CLIENT may cancel the contract altogether if I decide to stay opted in. Rock and a hard place? Nice to see I actually have a choice...

    However the agency most definately did not make this option available...

    "Most IT and engineering contractors contracting via an agency will come within the Regulations including limited company contractors which are specifically included by regulation 32. In the case of limited company contractors, however, the individual worker and his limited company can agree that the regulations are not to apply and providing they then give notice of that agreement to the agency before being introduced to the client or starting work, the regulations will not apply. The ability to opt-out in this way applies only to limited company contractors.

    And I most definately feel that they ARE doing the opposite of this...

    "It is unlawful for the agency to make assignments conditional upon the limited company contractor opting out in this way. "

    Bearing in mind that sofar this is the agency speaking and NOT the client. I feel as though the contract IS conditional upon opting out.

    Do I:

    A) Accept the agencies view (bearing in mind I want the contract).
    B) Phone client directly (very possible) to get horses mouth view.
    C) Stick to my guns and risk losing contract altogether.

    The benefit of anybodies wisdom would be very well received

    Many thanks in advance,


    Steve

    #2
    Why don't you just choose to opt out? There is virtually no advantage to opting in, except the possibility of going direct in the future.

    Comment


      #3
      Yes thanks Mordac, having had more time to digest the new regs I am beginning to agree with you...

      It's always nice to get other opinions though, especially as I've been out of contracting for a while and am hurriedly trying to play catchup, without being caught-out... if you understand my meaning.

      Thanks,


      Steve

      Comment


        #4
        Most agencies are fairly ignorant of the new regs, and just see the headline bit about going direct (and cutting them out) and run scared. Needless to say they will try every trick in the book to get you to opt out. This (IMHO) is usually a sign of a poor agency, in that the better ones will have made more of an effort to understand the regs, and adjust their business practices as necessary.
        I would have no problem opting out, but I would be a bit wary of an agency using the tactics you are describing, they may just be the symptoms of bigger problems around the corner.
        Feel free to name the agency, there may be contractors who can give you a better idea of how good they are.

        Good luck.

        Comment


          #5
          You are a fool if you opt out! All the agencies are trying to do is protect their revenue stream and stop you from going direct at the end of the contract period.

          They cannot make opting out a condition of employment/the contract and it makes absolutely no difference to the client whether you are opted in or out or shake it all about.

          Tell them to take some harden up pills and be prepared for you to leave them at the completion of the contract :rollin

          On the other hand...you could always tell them you will opt out now and then when you send your signed contract back also send a letter saying you are opting back in...watch the reactions on that one :rollin

          Mailman

          Comment


            #6
            Re: Reality bites!

            Report the agent to the DTI.

            They can not change the contract terms and conditions based on your "opted" status.

            They are supposed to present all details of the job to you and you then decide whether to opt in or out.

            Talk to the client. Point out to them that your opted status does not touch them in any way, in fact, if there are any problems in the future you will be (at worst) seen as an employee of the agent.

            Talk to the agent. Tell them you are willing to opt out, but only if the consequent contract is to your satisfaction.

            To those of you who say opt out, you want to try reading the regs again.
            Opting out is a dangerous thing to do and in most cases will leave you worse off.
            The regs force a number of things to happen as long as you are opted in, not the least of which (from our viewpoint) is the matching of contract terms of all parties. Should you get to an IR35 review you can point at the contracts being the reality as otherwise the agents have broken the law. This has not been tried yet but I think there is a strong case here to remove the IRs ability to construct a theoretical contract.
            The regs also require the agent to state if the contract is one of service or for services, this is a strong IR35 pointer.
            The agents are afraid of 2 sections. One is the 8 week period where you can bail on the agent, the second is the requirement for the agent to pay your invoice whether the client does or not.
            Use all of th above to negotiate. If in doubt opt in.

            Comment


              #7
              Re: Reality bites!

              Once again you demonstrate a lack of understanding of the legislation. You can't simply play the Hokey-Cokey by opting out and then in again. Chances are that by the time it's got to the stage described, the agency will demand an opt-out form has been signed by you BEFORE they will let you sign the contract.
              Hahahaha...sorry...but you have no idea do you. You can opt back in as long as you do it before you start the contract. Its all perfectly legal. :rollin

              To those of you who say opt out, you want to try reading the regs again.
              Wise words Widget. I believe it is extremely dangerous for contractors to opt out without cast iron clauses in the "opted out" contract that guarantees things like payment regardless of whether the agent has been paid or not.

              Mailman

              Comment


                #8
                Reality bites!

                "You are a fool if you opt out!"
                Er... no. Reading the situation, he would be a fool if he opted IN and lost the contract!

                "They cannot make opting out a condition of employment.."
                Well, Mailman, welcome to the real world, where agencies will try their damnest to get you to opt out; even going so far as to ruin the chances of you taking this contract.


                "...send a letter saying you are opting back in"
                Once again you demonstrate a lack of understanding of the legislation. You can't simply play the Hokey-Cokey by opting out and then in again. Chances are that by the time it's got to the stage described, the agency will demand an opt-out form has been signed by you BEFORE they will let you sign the contract.

                Strong arm tactics? yes. Unethical? indeed. But that's what happens in reality.

                Comment


                  #9
                  Re: Reality bites!

                  Report the agent to the DTI.
                  And that will get you precisely where? No contract, possible slap on wrist for agency 6 months down the line when DTI official gets round to doing something about it, or not. I'd say there was a fair chance your letter will go straight in the bin.
                  As I said, this strong-arm stuff is probably indicative of a poor agency, and I'd be more wary of problems with them somewhere down the line, rather than quibbling over opted-in status.

                  Comment


                    #10
                    Re: Reality bites!

                    You can opt back in
                    Are you sure about this MM?
                    I know we discussed it recently. I read the regs and the wording seems to have changed recently. It appears to me that once you have signed the opt out you can not change your mind for the length of the contract and any extensions to it (barring material change).

                    Comment

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