AWR and Umbrella

[Madocks]

Evening,

My agency (Morsons) have issued a statement that claims all LTD sub contract staff do not come under the AWR rulings as LTD companies are outside of IR35.

However, umbrella companies fall inside of AWR and have been awared the following;

1.25 time for overtime
1.5 time for weekend work
35% uplift for continental work
30% uplift for nights

Us contractors with our own LTD companies are expected to work overtime, nights and conti shifts for single rate.

Does this sound fubar to you guys?

[Goatfell]

Evening,

My agency (Morsons) have issued a statement that claims all LTD sub contract staff do not come under the AWR rulings as LTD companies are outside of IR35.

However, umbrella companies fall inside of AWR and have been awared the following;

1.25 time for overtime
1.5 time for weekend work
35% uplift for continental work
30% uplift for nights

Us contractors with our own LTD companies are expected to work overtime, nights and conti shifts for single rate.

Does this sound fubar to you guys?

No, that sounds exactly the way you should want it to be.
Contractors working through umbrella fall within the scope of AWR, as a contractor whose services are being provided by YourCo, you are outside AWR.

In scope: premium rates, paid holidays, sick pay, access to staff facilities, certain bonuses blahblahblah.
Out of scope: the freedom to operate your business as you see fit, with all the benefits that brings.

Though BIS states that merely operating though a PSC for tax purposes does not definitively put out you of scope. AWR Guidance notes Page 9.

[LisaContractorUmbrella]

Just because you work through your own limited company does not mean that you will fall outside the scope of the AWR - although there are yet to be any court tests the guidance from BIS has indicated that the same tests used to determine status under IR35 will apply to AWR.

[TheFaQQer]

My agency (Morsons) have issued a statement that claims all LTD sub contract staff do not come under the AWR rulings as LTD companies are outside of IR35.

Well, they're wrong. Ltd companies cannot be "outside IR35" - a particular contract that the Ltd is engaged on may be outside IR35, but that doesn't make the Ltd "outside IR35" - otherwise avoiding IR35 would be simple. Also, working through a Ltd does not necessarily avoid AWR - you can avoid AWR by genuinely being in business on your own account (so an outside-IR35 contract would probably mean you are outside AWR).

However, umbrella companies fall inside of AWR and have been awared the following;

1.25 time for overtime
1.5 time for weekend work
35% uplift for continental work
30% uplift for nights

Yay for those that work through umbrella companies - good negotiating on their part.

Us contractors with our own LTD companies are expected to work overtime, nights and conti shifts for single rate.

Does this sound fubar to you guys?

What does your contract say? If there is nothing in there about differing rates, then you get the same rate.

I'm wary of your phrase "expected to work overtime..." - if the client is offering you work and you are obliged to accept it, then that buggers your IR35 status. Which makes a mockery of the first statement.....

[Waldorf]

Evening,

My agency (Morsons) have issued a statement that claims all LTD sub contract staff do not come under the AWR rulings as LTD companies are outside of IR35.

However, umbrella companies fall inside of AWR and have been awared the following;

1.25 time for overtime
1.5 time for weekend work
35% uplift for continental work
30% uplift for nights

Us contractors with our own LTD companies are expected to work overtime, nights and conti shifts for single rate.

Does this sound fubar to you guys?

They will have to match what they offer the permanent staff, however whether these higher rates will ever be paid, I very much doubt.

At the end of the day someone has to pay for AWR and it is certainly not going to be the client, agency or umbrella, it will be the contractor.

Some umbrella companies will make out that they are suffering the extra costs, and some may do for a while, but when the full cost and implication of AWR has fed through the systems, even the they will have to start passing on the extra costs.