contract between agency and limited company/individual

[kai666]

I was with one of the former MSC's and was looking to take my limited company to one of the accountants regularly recommended on this forum.

I work through an agency, and was asked for my contract for the accountant to look at my ir35 status. After she recieved it, she said it the the wrong contract , the one i sent was between me and the agency. They needed one between my limited company and the agency.

The agency said they don't do this, and told me to join an umbrella company, or go back to PAYE.

But surely the agency forms a contract between the umbrella company and themselves? so whats the difference between a contract with my limited company and an umbrella company?

[malvolio]

But surely the agency forms a contract between the umbrella company and themselves? so whats the difference between a contract with my limited company and an umbrella company?

Quite a lot actually. You are an employee of the umbrella, the agency has a general contract with the umbrella for them to manage the supply of warm bodies and look after all the money. Adding YourCo to the mix means they lose that and have to set up a totally different contract between them and YourCo correctly describing the new relationship.

Why they won't do so is another question altogether. They probably have some kind of pointless agreement with the end client that is supposed to protect the client against employment claims and HMRC investigations - if all their contractors are PAYE or Brollyed, IR35 doesn't apply (but that still does nothing to protect them against employment claims and HMRC investigations, sadly)

So you have a problem. How well do you get on with the client, because you may well need their help before very long.

Who are the agency - that would be a good start point?

[kai666]

the agency is called social workline, and I am currently working for social services in one of the london boroughs

As the pay is not nearly as great as people in IT seem to get, the difference between PAYE and a limited company is making me wonder if it is worth the effort.

I had heard it is easier to get a mortgage and things if you have a limited company rather than work for an agency, which is why I was looking at the limited compnay route

[kai666]

Just out of curiosity, how come when i was with a former MSC i didn't need a contract between them and my limited company, but I do now?

Is it the change in law, MSC's didn't need them or they were not doing things correctly?

Sorry if this has been asked, but i couln't find the answer

cheers

[Lewis]

Just out of curiosity, how come when i was with a former MSC i didn't need a contract between them and my limited company, but I do now?

Is it the change in law, MSC's didn't need them or they were not doing things correctly?

Sorry if this has been asked, but i couln't find the answer

cheers

I suspect you'll find there was a contract between your agency and your MSC - I can't see how it would have worked otherwise. e.g. how could you get dividends if the MSC wasn't involved.