Any basis for Banks not accepting agency candidates from LLPs

[jpp]

Having provided consulting services to investment banks in each of the last two years, once directly and once through an associate (also an LLP business) I am told by an agency that many Banks now no longer accept candidates who are coming to them as members of LLPs. We're currently a 3 partner firm.

Given the increasing prevalence of framework agreements that the major banks now have with agencies, and the difficulty of gaining work directly, this is a bit of a worry. I really don't want to have to suggest to my partners that if we want to work with banks we have to either convert to an Ltd, or have to set up something separate and have all the joys of PAYE, Corporation Tax and Dividend distribution hassle that Ltds entail.

Is there any real basis to this flat refusal to deal with agencies promoting candidates from LLPs? Certainly none of the HMRC IR35 'employee' tests for partnerships or contracts apply to any of our work.

[tarbera]

Any basis for Banks not accepting agency candidates from LLPs

No good reason, but it's not going to change soon

It's like the on site team refusing to take a contractor on before they see his high school certificate 30 years ago not mentioned on his CV and not relevant to the contract no matter how many times its pointed out how silly it is

You are pushing water up a hill

[TykeMerc]

It's their choice, they are entitled to decide who they will do business with and if that excludes contractors via LLP's then there's nothing anyone can (or for that matter should) do about it.
I assume it's something in a risk profile that the banks have identified. You can of course complain to the possible clients, but if they elect to make that another ground for ignoring you as a supplier that's your risk.

[northernladuk]

Is it the banks not accepting it or the agents not wanting to deal with you? I suspect in many cases as soon as you present something that is out of the 'norm' for the agent he won't be interested. He'll just say no thanks and pick the next guy in line. I doubt many agents know enough about LLP's to bother dealing with you.

[Lewis]

have to set up something separate and have all the joys of PAYE, Corporation Tax and Dividend distribution hassle that Ltds entail..

Your accountant will do all of this for you, including setting up the company. It is not at all arduous. There are lots of accountants recommended here. Expect to pay in the region of £100 per/month for this service. You may also find you are financially better off working through a Ltd. I would advise you to do a side by side comparison of costs and benefits of LLP vs LTD.

[TheFaQQer]

Rightly or wrongly, LLPs are seen as a tax evasion scam - and so customers and agencies are steering clear of them because they worry that they might get hit with your tax bill.

Presumably there is nothing to stop you having a limited company that then subcontracts the work to the LLP, though, so you get the tax advantages of the LLP but still meet the agency / client supplier criteria.

[TykeMerc]

Rightly or wrongly, LLPs are seen as a tax evasion scam - and so customers and agencies are steering clear of them because they worry that they might get hit with your tax bill.

Presumably there is nothing to stop you having a limited company that then subcontracts the work to the LLP, though, so you get the tax advantages of the LLP but still meet the agency / client supplier criteria.

True, you could just invoice straight through, only additional negative is the admin cost on the Ltd.