Contractor/Agency rights to choosing an Umbrella Company

[Jet Setter]

However, in Oct 2007 HMRC issued a statement clarifying the situation:

"Provided that the Employment Business has not, since 6 April 2007, been directly or indirectly involved in the workseeker obtaining the company, then the Employment Business will not be liable for any PAYE or National Insurance debt under the transfer of debt provision should it subsequently transpire that the workseeker’s company is a Managed Service Company."

HMRC are effectively saying that the agency should not have any involvement in the worker's choice of intermediary. Therefore by restricting your choice of umbrella company, your agency has opened itself up to the MSC transfer of debt provisions. If you educate your agency about this, you may find their stance changes. The following link may be of use:

http://www.hmrc.gov.uk/employment-st..._companies.htm

It's amazing how few agencies seem to know that by operating a PSL they can lose the exemption they have under the MSC legislation.

As previously stated though, most agencies have no problem with people using their own companies.

[LisaContractorUmbrella]

The debt transfer section of the MSC legislation can only be applied if the agency recommends or actively encourages workseekers to use a managed service company. Agencies are under no threat from the legislation provided that they ensure that any umbrella company that features on their PSL only makes payment via PAYE.