Contract agency not willing to sign a contract with my umbrella company

[prpanther]

Hello all,

I am new to this forum. I just got my first contract here in the UK. The agency that hired me is a leader in the UK. Since I don't have a limited company here, I am opting for an umbrella company. But my agency is refusing to work with my preferred umbrella companies and instead insisting to choose one from their preferred list.

I spoke to the umbrella companies in their list. They seem to provide PAYE type scheme with a minimal invoicing fee every month. But unfortunately, I am losing a big chunk in tax every month.

Alternatively, I was thinking of choosing an offshore company scheme which gets me better returns. While there are arguments for and against this scheme, this post is not related to this.

I want to know, if it is legal for an agency to force me to use one of their own recommended umbrella?

Thanks.

[Churchill]

Hello all,

I am new to this forum. I just got my first contract here in the UK. The agency that hired me is a leader in the UK. Since I don't have a limited company here, I am opting for an umbrella company. But my agency is refusing to work with my preferred umbrella companies and instead insisting to choose one from their preferred list.

I spoke to the umbrella companies in their list. They seem to provide PAYE type scheme with a minimal invoicing fee every month. But unfortunately, I am losing a big chunk in tax every month.

Alternatively, I was thinking of choosing an offshore company scheme which gets me better returns. While there are arguments for and against this scheme, this post is not related to this.

I want to know, if it is legal for an agency to force me to use one of their own recommended umbrella?

Thanks.

You work here, you pay tax and National Insurance here.

Welcome to the club and thank you for helping us through our current economic crises...

[realityhack]

Hi prpanther,

Welcome to CUK. You've posted this in General, but I'll move it to business/contracts as it's more likely you'll get constructive advice there.

As far as I know, you can use whatever umbrella co or ltd arrangement you choose. I wouldn't take kindly to any agency forcing me to use a preferred supplier.

RH

[alreadypacked]

Open a limited company it will be easier all round. Agents don't like it when you argue with them.

[meridian]

Hello all,

I am new to this forum. I just got my first contract here in the UK. The agency that hired me is a leader in the UK. Since I don't have a limited company here, I am opting for an umbrella company. But my agency is refusing to work with my preferred umbrella companies and instead insisting to choose one from their preferred list.

I spoke to the umbrella companies in their list. They seem to provide PAYE type scheme with a minimal invoicing fee every month. But unfortunately, I am losing a big chunk in tax every month.

Alternatively, I was thinking of choosing an offshore company scheme which gets me better returns. While there are arguments for and against this scheme, this post is not related to this.

I want to know, if it is legal for an agency to force me to use one of their own recommended umbrella?

Thanks.

You seem to be implying that with your chosen brollie you wouldn't be losing a chunk in tax every month.

Care to enlighten us as to which brollie is your chosen one? That may explain why the agency doesn't want to do business with them.

[prpanther]

Hi prpanther,

Welcome to CUK. You've posted this in General, but I'll move it to business/contracts as it's more likely you'll get constructive advice there.

As far as I know, you can use whatever umbrella co or ltd arrangement you choose. I wouldn't take kindly to any agency forcing me to use a preferred supplier.

RH

Thanks for the advice. Any idea, how I could resolve this? The agency is simply not willing to raise Purchase order etc unless I choose one of their supplier. Unfortunately, they seem to have a bit of upper hand, since they referred me to the client and I doubt if the client would be willing to offer a contract to me, if I approach them directly without this agency.

[prpanther]

Open a limited company it will be easier all round. Agents don't like it when you argue with them.

I am really afraid of IR35 and other unknown things

[Sausage Surprise]

I am really afraid of IR35 and other unknown things

Yet you are considering an offshore scheme. FFS!

IR35 is being reviewed btw.

[prpanther]

Yet you are considering an offshore scheme. FFS!

IR35 is being reviewed btw.

[pmeswani]

I am really afraid of IR35 and other unknown things

If you are afraid of unknown things, then why are you chosing an offshore company? Are you really keen on being a possible target from HMRC? Seriously, go with an inland Umbrella company. In any case, going with an Umbrella company will not have any bearing on IR35.

If you are going Ltd Co, all you need to do, as a first step, is to get your contract reviewed by a IR35 specialist, and as a second step is to be careful of your working practice. I know there are other IR35 pointers, but those 2 will be good starters for 10.

And as already stated, IR35 is currently being reviewed.