Agency will not permit dividend method of payment

[Not So Wise]

Did she inform the client or agency? I would definatly inform the client (if position was offered) as well as agency otherwise god only knows what tulip the agency will be saying...possibly even that "there is a IT skill shortage in the UK"

[Rebecca Loos]

they have the wording right then in theory it could be enforceable

And what wording would that be?

I still can't see the agency, having paid the umbrella a sum of money, can then have a say in how that sum of money is going to be paid out to the various recipients (recipients that the agency is not even supposed to know about?)

[Not So Wise]

Not sure on the exact wording that would be needed (IT contractor not lawyer ) but i have seen high level finance contracts (gov level) where they have stipulated how the various partys (from principles to intermediaries) may receive payment, even what they can spend that payment on (like forceing them to spend a percentage on 3rd world development/charitible cause's) so if they can do it at that level see no reason why they could not do and enforce it (if they chose to persue it) at our level.

Knowingly having something in the contract and just ignoring it because you think it is unenforceable (different from knowing it is illegal which this is not) is something that i would never recomend doing

[Rebecca Loos]

I will have to take your word for it since you have seen it but it still puzzles me - as a business principle it seems very strange.

I wouldn't recommend ignoring unenforceable things either (although I would probably still do it) but I guess I am first trying to establish whether this is illegal or not.

I wonder if I could say to the government: here's a cheque for my taxes. Now I do not want you to spend it on military spending. To my council: here is my council tax but it is not to be spent on stupid summer parties.

Doable? Mmmh......

[Not So Wise]

In theory you could, if you had a contract with the goverment. Sad thing is we don't, what we do have is a legal requirement to pay said tax's

More i think about less i think it would not be enforceable, if banks and such can stipulate what loans should be used for see no reason why they could not here, legally that is.

Now ethiclly is a totally different matter and because of that would never sign a contract like this, but i would each and every time keep stum about it till point job was offered and then inform the client why i was not taking the contract. If i was a client and got a few calls like that would soon stop useing that agency, not because they were "screwing over contractors" (like really what client cares?) but because i would rapidly start to doubt they could provide me with the "best talent money can buy"

I would say things like this appearing in contracts is probably from unofficial presure from the IR, it is quite common for them to "force" (do it or get audited) larger agencys to change methods of buisness or put contract clause's in to keep contractors in line where they cannot get an actual law to do so.
Last time i came across it directly was around 2000 when agency i had been with for a few years suddenly would/could no longer accept my offshore (Gibraltar) company, because i knew the accounts department folks well well they told me off the record that IR had told them (also off the record) to "drop contractors using Gib companys or else".

[ahardy66]

Play with the letters of the name to see who we're talking about.

er... axel man? Never heard of any agency with those letters - but it *is* late. At least they weren't on jobserve's agency listings.

[Rebecca Loos]

Not So Wise - the Gibraltar thing is a bit different, though, isn't it? The IR told your agency to not deal with a Gibraltar company, and as the relationship between your agency and the Gibraltar company is direct, then it is easily enforceable. It would be a bit like the government asking UK companies not to do business with companies from a specific country (e.g. North Korea) - perfectly legal for the government to enforce that.

However, the bit of the chain that the IR objects to, in the case of divi payments, is something that is not directly related to any transactions involving the agency. The agency pays your company (or umbrella), who then subsequently (and independently of the agency) pays you. The agency has no visibility whatsoever in what happens to the money once it has left the agency's bank account. Hence surely it is not legal for them to enforce such a clause, since they have no legal visibility of the transactions involving money that they have paid out.

[Ardesco]

Sounds like a load of tosh to me. How can the agents prove that the money from this contract was used as a dividend payment, you may already have money in your account that is used for dividend payments while this money is used to pay for company expenses.

I would tell them to swivel on thier contract and write up something belivable that is enforcable.

[Mailman]

Even if they asked for the info to confirm how you paid the money out just tell them that information is sensitive and that you wont be providing any info you consider business critical to them

Mailman

[simes]

er... axel man? Never heard of any agency with those letters - but it *is* late. At least they weren't on jobserve's agency listings.

Oh grief - Alexander Mann, man!

I have a call waiting with Filetravel, when I have answers I will report back. They confirmed that AM was one of a couple of agencies doing this.