new contract signed by both parties then next day asked to go umbrella/paye

[boj27]

Hi all,

so as above, i yesterday got my new contract which spans 1st of jan until the 30th of march, ideal as this is just before the new ir35 legislation comes into play. there is talks that my contract is then going to no longer be further extended so this worked out well for me anyway.

so i get my contract, sign it, and send it off. i asked a few questions regarding public liability insurance (contract said i needed it but i work from home so can't see why I would need it) and also about employers liability insurance (again, contract said I needed it but i am the sole director of my own LTD so not applicable again). the email I got in response to these questions was in a complete turn around - they advised my client no longer accepts LTD workers and I need to go PAYE or umbrella. I assume this is a blanket policy by my client to cover their backs (seems a lot of banks have done this, my client is a large accountancy firm).

my question is, since my contract has already been signed by my ltd (myself) and the agency i am supplied through, and considering this has been signed up until the 30th of march by both parties, can they legally tell me I need to go umbrella/paye before the 30th? IR35 don't come into affect until the 6th of april so I am hoping the answer is yes?

in regards to PAYE and umbrella, is there a benefit to going with either if my contract renews past the 30th?

this is my first post and first contract so please take it easy on me

[northernladuk]

Not ideal ending on 31st March as you won't get paid in time. This is explained endlessly in the stickies and many other posts.

Yes it's legal. They just terminate the old contract and issue you a new one. What you should have done before signing is ask what the client is doing about determinations. They have to be made before April so will land at some point in your contract. It's absolutely essential that you find out whats happening before you sign as these decisions are happening now, as you've found out. Bit odd in this instance they are implementing it before April though.

Plenty of information about the difference between PAYE and umbrella in posts on here and the Web.

As you can imagine these are pretty basic questions that a vast majority of contractors are facing so fair to assume these topics have been very well covered on here and the Web so it would be a good idea to read up and get yourself well prepared.

[simes]

A tough break indeed.

I daresay there will be more of this sort of behaviour in the ensuing months. People have been seen to run scared of contracts' 'power' but at the same time, they can be shown to be so meaningless when exposed to this sort of a turnaround, and when work dries up and notice periods are ignored.

For my part, with a context of being in a relatively good position (war chest / other incomes), I would put my foot down and walk. This sort of nonsense cannot be abided, especially with the situation only to be made worse for a contractor's outcome post April.

Good luck with your decision.

[wattaj]

...ideal as this is just before the new ir35 legislation comes into play...

No, not "ideal". One has to assume that your final payment from this contract will arrive post the April implementation, so that payment will be caught.

...my question is, since my contract has already been signed by my ltd (myself) and the agency i am supplied through, and considering this has been signed up until the 30th of march by both parties, can they legally tell me I need to go umbrella/paye before the 30th?...

Yes, they can terminate your current contract and offer you a new one that operates via an umbrella.