Coming in from the Dark Side....

**Craig@Clarity** · 8 March 2011, 18:33

Hi Andy,

The curry/beer induced conversation would have been about the Agency Workers Directive. You can find more information here Agency Workers Directive

**malvolio** · 8 March 2011, 18:47

Originally posted by Craig@InTouch View Post

Hi Andy,

The curry/beer induced conversation would have been about the Agency Workers Directive. You can find more information here Agency Workers Directive

And, typically enough for an agent, he's wrong. Limited Company contractors are out of scope.

**andyc2000** · 9 March 2011, 07:44

Thanks guys, I'll correct said agent on the next curry/beer night...

**Vallah** · 9 March 2011, 10:23

You'll be OK with the AWD as long as you don't work through an umbrella company. They're going to get absolutely hammered later in the year.

**LisaContractorUmbrella** · 9 March 2011, 10:32

Originally posted by Vallah View Post

You'll be OK with the AWD as long as you don't work through an umbrella company. They're going to get absolutely hammered later in the year.

What makes you say that Vallah??

**Steven@Parasol** · 9 March 2011, 14:28

Originally posted by malvolio View Post

And, typically enough for an agent, he's wrong. Limited Company contractors are out of scope.

Not strictly true Malvolio,

Looking at the most recent consultation document published by BIS in January 2010.

In section 3.9 the Government makes it very clear that limited company contractors are to be included. The paragraph reads:

“If a very general provision were made to exclude, for example, anyone who has a share holding or holds office in a limited company, this could make it easier for unscrupulous parties to set up business models – for instance, minimal share holdings could be used to circumvent the protection of individuals under the directive. Since a properly legally constituted shareholding could be difficult to challenge, and this approach may unwittingly make it harder for employment tribunals to police in ‘sham’ or other avoidance arrangements. Our conclusion therefore is that the disadvantages of expressly excluding LCCs (limited company contractors) would outweigh any perceived benefits.”

The document also makes it clear that the government is happy to let case law shape how the AWR are applied. Section 3.8 of the January 2010 consultation document reads (link):

“On the issue of ‘sham’ self-employment or other similar avoidance we remain of the view that the Courts and Tribunals are capable of determining employment status and identifying such avoidance devices.”

The absence of further guidance on the AWR to date has been unhelpful in some respects but we believe that the Government has made it very clear that limited company contractors do fall within the scope of the AWR and no further guidance or consultation will change this.

The only way a limited company contractor would NOT be caught is when working for an end-client via a limited company but NOT under the supervision or direction of the hirer, then they are NOT caught by the AWR. This is in line with the IR35 legislation however there has not been any official link made between the two pieces of legislation.

**Steven@Parasol** · 9 March 2011, 14:30

Originally posted by andyc2000 View Post

Hi all

Having been contracting for a few years, I'm ditching my current (very efficient) tax planning and will be going Ltd on the next contract. However I was talking to an agent, whilst out for a curry, who mentioned that the new laws coming in to 'protect' temporary employees, will effectively screw up contracts that last more than 12 weeks as you get employee type rights applied (and you can't opt out of this), does anyone know about this? Bear in mind there was beer so I may have got this entirely wrong...

Thanks

A

Check out Understanding AWR – Agency Workers' Regulation Information for more resources on AWR. I am bais as I manage the site but if you have a comment or article you'd like to post let me know.

**LisaContractorUmbrella** · 9 March 2011, 14:35

I agree with Steve on this one - I have seen nothing to indicate that this legislation will not apply to Limited Company contractors and I also think that many people are being presumptuous in assuming that the regs will have a massive impact on umbrella companies - none of us has seen any guidance notes from the powers that be yet so really all of this is guesswork

**Steven@Parasol** · 9 March 2011, 14:36

Originally posted by Vallah View Post

You'll be OK with the AWD as long as you don't work through an umbrella company. They're going to get absolutely hammered later in the year.

Absolute nonsense.

The AWR is a massive opportunity for correctly structured umbrella companies who are already 8 tenths of the way to being a fully compliant solution.

One of the options we will be offering contractors is based on the 'Swedish Derogation Model'.

As part of this we will be paying contractors inbetween assignments, providing pensions (which will be law anyway from 2012) and activley assisting contractors to find their next assignment via the 2,500 recruiters we work with.

For recruiters and end-clients, all the risks associated with the AWR are mitigated to the umbrella as the employer of record, contractors will recieve extra benefits, so surely is positive all round?

Coming in from the Dark Side....