Forum
Overtime rate cuts for Ltd contractors
Hello
I am a self employed contractor with a Ltd company who provides services to a client through an agency. I work for a client who regularly requests its employee's and contractors to do overtime to get the work completed to meet the deadlines.
A while back I was part of an umbrella company, and I was told that it was risky to be under one of these umbrella company's because they were the 'big fish' that the HMRC would likely target. I believe that there was some sort of new rules and regs that came in that these umbrella companies had to fall in line with. After a long meeting with their proposals, it was very unclear as to what they were offering. we were told by the umbrella company to 'trust them'. When I asked to get the details of the offer on paper, they refused....I wasn't comfortable with this as I felt they had something to hide, and this was when I decided the best route was to set up my own Ltd company.
About 2 months after this, the umbrella company threw in the towel and folded. This gave me the confidence that I had made the right move. It has taken me a lot of time, effort and stress to get my Ltd company up and running and to understand how to deal with the company affairs but now I am confident that I understand the process.
Recently, the client I work for has said that they are not prepared to pay holiday entitlement or employers NI as part of the overtime rates for Ltd contractors. They say that this is for their protection because apparently there has been a recent case where a Ltd company was prosecuted by HMRC and the client he was working for also got dragged into the case somehow (?). The agency I work through has told me that if I go with an umbrella company, the company will honour the holiday entitlement and employers NI contributions in the OT rates, and they went on to say that this is a safer bet for me to prevent an attack from HMRC.
As you can imagine this is very frustrating for me because I have come down the Ltd company road to be in a safer position than I was before, but now they are telling me that if I want to be safer, I must go back to an umbrella company which is where I came from! also this would be the only way to get the full OT rates which are much needed in my case because I am saving for a deposit on a house.
I am having a meeting with the agency on Tuesday.
Any advice on this scenario would be most appreciated.
Thanks alot
Tencher
I am a self employed contractor with a Ltd company who provides services to a client through an agency. I work for a client who regularly requests its employee's and contractors to do overtime to get the work completed to meet the deadlines.
A while back I was part of an umbrella company, and I was told that it was risky to be under one of these umbrella company's because they were the 'big fish' that the HMRC would likely target. I believe that there was some sort of new rules and regs that came in that these umbrella companies had to fall in line with. After a long meeting with their proposals, it was very unclear as to what they were offering. we were told by the umbrella company to 'trust them'. When I asked to get the details of the offer on paper, they refused....I wasn't comfortable with this as I felt they had something to hide, and this was when I decided the best route was to set up my own Ltd company.
About 2 months after this, the umbrella company threw in the towel and folded. This gave me the confidence that I had made the right move. It has taken me a lot of time, effort and stress to get my Ltd company up and running and to understand how to deal with the company affairs but now I am confident that I understand the process.
Recently, the client I work for has said that they are not prepared to pay holiday entitlement or employers NI as part of the overtime rates for Ltd contractors. They say that this is for their protection because apparently there has been a recent case where a Ltd company was prosecuted by HMRC and the client he was working for also got dragged into the case somehow (?). The agency I work through has told me that if I go with an umbrella company, the company will honour the holiday entitlement and employers NI contributions in the OT rates, and they went on to say that this is a safer bet for me to prevent an attack from HMRC.
As you can imagine this is very frustrating for me because I have come down the Ltd company road to be in a safer position than I was before, but now they are telling me that if I want to be safer, I must go back to an umbrella company which is where I came from! also this would be the only way to get the full OT rates which are much needed in my case because I am saving for a deposit on a house.
I am having a meeting with the agency on Tuesday.
Any advice on this scenario would be most appreciated.
Thanks alot
Tencher
- Contact in PM
simonsjdaccountancy
Messages count : 23Likes count : 0Registration : 29 November 2006Hi,
I think you are being fed a bit of a line here.
As a contractor working through a Ltd Co you get a fixed rate - there should be nothing in addition to this - certainly no employers NI or holiday pay. If they wanted to pay you extra to compensate you for not having holiday pay etc then it should be as an increase to the hourly/daily/monthly rate.
Drop me a mail if you like with more details - simon@sjdaccountancy.com
Tencher, post: 11903 a écrit : Hello
I am a self employed contractor with a Ltd company who provides services to a client through an agency. I work for a client who regularly requests its employee's and contractors to do overtime to get the work completed to meet the deadlines.
A while back I was part of an umbrella company, and I was told that it was risky to be under one of these umbrella company's because they were the 'big fish' that the HMRC would likely target. I believe that there was some sort of new rules and regs that came in that these umbrella companies had to fall in line with. After a long meeting with their proposals, it was very unclear as to what they were offering. we were told by the umbrella company to 'trust them'. When I asked to get the details of the offer on paper, they refused....I wasn't comfortable with this as I felt they had something to hide, and this was when I decided the best route was to set up my own Ltd company.
About 2 months after this, the umbrella company threw in the towel and folded. This gave me the confidence that I had made the right move. It has taken me a lot of time, effort and stress to get my Ltd company up and running and to understand how to deal with the company affairs but now I am confident that I understand the process.
Recently, the client I work for has said that they are not prepared to pay holiday entitlement or employers NI as part of the overtime rates for Ltd contractors. They say that this is for their protection because apparently there has been a recent case where a Ltd company was prosecuted by HMRC and the client he was working for also got dragged into the case somehow (?). The agency I work through has told me that if I go with an umbrella company, the company will honour the holiday entitlement and employers NI contributions in the OT rates, and they went on to say that this is a safer bet for me to prevent an attack from HMRC.
As you can imagine this is very frustrating for me because I have come down the Ltd company road to be in a safer position than I was before, but now they are telling me that if I want to be safer, I must go back to an umbrella company which is where I came from! also this would be the only way to get the full OT rates which are much needed in my case because I am saving for a deposit on a house.
I am having a meeting with the agency on Tuesday.
Any advice on this scenario would be most appreciated.
Thanks alot
Tencher - Contact in PM
web-design-uk
Messages count : 3Likes count : 0Registration : 31 March 2009I don't see any reason why and umbrella company will be safer than yuor own limited company. A limited company is perfectly safe as you will always be in control of decisions no matter what happens.