Sellers trading as limited companies

There is very little difference in the operation of people4business.com between Sellers who trade as limited companies and those who do not.

However, we recommend to all our limited company Sellers that you opt out of The Conduct of Employment Agencies & Employment Businesses Regulations 2003.

Remember that all Sellers must be paid either through an umbrella company (or consultancy) or through a limited company. This ensures that we can be certain that you are paying all the tax and National Insurance you owe. Otherwise either we – or our Buyers – could become liable for any unpaid tax.

The limited company ‘opt out’

The Conduct of Employment Agencies & Employment Businesses Regulations 2003 (the ‘Regulations’) potentially apply to the services we provide to limited company Sellers (‘Sellers’). The Regulations are intended to protect vulnerable workers from exploitation, but the government realised that the provisions of the Regulations may be detrimental to some highly skilled Sellers and, subject to safeguards, allowed Sellers to opt out of the Regulations.

In this page we explain the advantages to you of opting out of the Regulations.

Who can opt out

Any Seller can opt out of the Regulations unless they work with children or vulnerable people.

The people4 marketplace sites do not supply Sellers to work with children or vulnerable people.

Advantages of opting out

• Tax advantages – the Regulations refer to the worker being under the ‘control’ of the client.
  If you wish to avoid being caught by the IR35 legislation, opting out of the Regulations may well assist your tax position, by allowing numerous commercial clauses to be used in your contractual relationship with us, indicating a commercial relationship with the client – demonstrating your status as a genuine business. Some of these clauses are prohibited under the Regulations – hence the advantage of opting out.
  
  
• Reduced administration – the administrative requirements of the Regulations are burdensome. They include a duty upon us to obtain formal, physical evidence as to your identity, experience, training, qualifications and professional authorisations. A Seller who stays within the Regulations will need to supply suitable documentary confirmations to us before we can legally provide them with work. So, remaining within the Regulations may, by virtue of inevitable delays, harm your flexibility to accept assignments.
  
  
• Client preference – many businesses specify that they only want Sellers who have opted out of the Regulations.
  Buyers may prefer opted out candidates as this enables them to reduce their administration, protect themselves against expensive employment rights claims and protect their legitimate confidential business interests.
  
  
• Ease of placement – due to reduced administration, Sellers who have opted out of the Regulations are easier to place in work. This is particularly important if the vacancy needs to be filled quickly.

Recommendation

It is of course your decision, but we strongly recommend that Sellers who wish to gain tax advantages by avoiding the IR35 legislation opt out of the Regulations.

If you don’t opt out

Due to the reduced administration that results from opting out, and the general preference our clients have for opted-out candidates, we recommend that all Sellers opt out.

If you do not wish to opt out of the Regulations, we will need to treat you as being covered by the Regulations and engage you upon terms that are compliant with the Regulations, which will not enable you to act on an IR35-friendly basis.

Please note: We do not make our provision of work-finding services conditional upon an opt out being exercised. 

How can I opt out?

In order to opt out of the Regulations, a Seller, and their limited company, need to give notice to us stating that they do not want the Regulations to apply.

This notice can be given in the ‘My Details’ area of your people4business homepage.

A notice that is given while a contract is ongoing, will not take effect until that contract has ended.

An opt out notice can be withdrawn, although, if withdrawn during a contract, this only takes effect after that contract has ended.

last updated 02.04.08