Could using a Recruitment Agent be detrimental to your IR35 status?
There are many aspects that you need to know about to ensure that you and your Limited Company are classed outside of IR35.
If you get the slightest thing wrong, HMRC will pick on it, take you to court and attempt to prove that you are a ‘disguised employee’. This will result in you having to pay a large amount of additional tax.
This short article is about considering whether using a Recruitment Agent could have a negative effect on proving that you operate a genuine company.
As a genuine Limited company, you should be supplying services to your end clients. You are not employed by your end clients and your end clients should not consider you to be a worker.
Try and think like other business to business services. You will be hard pressed to find any that use a Recruitment Agent to establish business arrangement.
Next look at some definitions of ‘recruitment’
Recruitment is the process of hiring new staff, from initial discussions around opening a new position and what the position entails through to on-boarding and developing the new staff member.
An employment agency is an organization which matches employers to employees.
You and your client should not be near any business arrangement that suggests that you are being recruited. Do not get involved in situations where you are referred to as a Candidate.
If you are a Software Services Provider with a Limited company in the UK and you would like to connect directly with potential clients, then please register here.