IT contractor - but going PAYE under a family members company?

[qwertyuiop725]

The agent's agreement is with the company. As a director you can sign for the company, but if you're not also the major shareholder it's possible the other shareholder(s) could get rid of you as a director before the contract is up. The agent then has a contract with somebody they know nothing about, who's different from the one doing the work. Easy to see why they might take issue.

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But could the same not happen with an umbrella company? Why is that different?

[pr1]

I'm not banned from being a director yet. But I plan on entering bankruptcy soon - when I will be banned.

I could go down the umbrella route - but any earnings above reasonable expenses are taken for the year and for 2 further years after bankruptcy which I obviously don't want.

Ideally - get family member set up a new limited company. Post-bankruptcy I can then buy the company from family member for a nominal token amount. That's the strategy - which is all legal by the way.

The only issue is will agencies sign a contract with company where I am the PAYE employee and family member is owner/director.

Alternatively could I get family member to set up a new umbrella company? Not sure how easy that is.

[BrilloPad]

I'm not banned from being a director yet. But I plan on entering bankruptcy soon - when I will be banned.

Then your bigger worry will be getting a contract.

Personally I would use an umbrella.

[qwertyuiop725]

Then your bigger worry will be getting a contract.

Personally I would use an umbrella.

I would plan on entering bankruptcy immediately after starting a new contract. Hopefully the contract would last 12 months (or a large portion of it) to get me to the other side of bankruptcy.

[SueEllen]

I would plan on entering bankruptcy immediately after starting a new contract. Hopefully the contract would last 12 months (or a large portion of it) to get me to the other side of bankruptcy.

Some contracts actually state if your situation changes e.g. you go bankrupt you have to tell them. I suggest you stay away from the finance, government and defence sectors.

[qwertyuiop725]

Some contracts actually state if your situation changes e.g. you go bankrupt you have to tell them. I suggest you stay away from the finance, government and defence sectors.

I wouldn't bother telling them. Realistically they would never find out - and even if they do find out after the event they probably wouldn't care at that stage.

[TheFaQQer]

I wouldn't bother telling them. Realistically they would never find out - and even if they do find out after the event they probably wouldn't care at that stage.

They will.

And some clients get picky about when you lie to them, strangely enough.

[qwertyuiop725]

They will.

And some clients get picky about when you lie to them, strangely enough.

Id take my chances - would be a lot less to lose if caught (which would be highly unlikely unless they decide to do a random check mid contract for some reason) rather than being upfront about the bankruptcy.

[SueEllen]

I wouldn't bother telling them. Realistically they would never find out - and even if they do find out after the event they probably wouldn't care at that stage.

Unfortunately you will find that some companies will do the background checks themselves and may not do them immediately you get on-site.

In the last two years I've had roles with defence and finance companies who both did the background checks themselves.

The finance company did the check before I got on-site while the defence company took their time. In the case of the defence company I was about half-way in the contract before they started looking into me. Another contractor who started before was let go suddenly mid-contract as he hadn't bothered handing reference information in.

[pr1]

In the case of the defence company I was about half-way in the contract before they started looking into me. Another contractor who started before was let go suddenly mid-contract as he hadn't bothered handing reference information in.

so like OP says, it would appear it's better to stay quiet and let them find out (or not) than to not have a contract at all

half a contract is more £££ than no contract!