Sorry about this i posted it before but only got one reply just wondering if any more advice is out there at the moment?

I started working through an agency about 4 years ago on a standard PAYE basis. They badgered me into working through a composite company, which I did. The tax laws changed in this years budget and I transferred to a full LTD company status.

The question I have is this. When I first changed to composite company, the agency said I would receive £1 per hour pay rise as their contributions and payroll responsibilities etc reduced. Whoo hoo I thought. When the budget changes came into being I was presented with 2 options 1. go back to PAYE or 2. Go ltd company route, I chose the LTD route. A colleague of mine working via the same agency decided LTD was not for her and contacted the agency saying she wanted to go back to PAYE. She was then informed that if she did her rate would drop by £3.50 an hour to reflect the additional costs to the agency. Here goes… if it costs the agency £3.50 an hour to transfer someone back to PAYE why didn’t I receive £3.50 an hour increase when I went from PAYE to composite???? There is a shortfall of £2.50 an hour that presumably has been pocketed by the agancy for every hour I have worked for the last 3 years.

Is this legal? Would it just be considered good business? Or should I have been given the full saving that the agency has been sticking in their pockets? It certainly seems unfair that a company can suddenly change how much they cream off the top of my salary. I would have thought they should have come to me and said if you transfer to composite company it saves us £x per hour and use that as a negotiating start point.

Sorry for the long post but I am considering court action but we are talking about £20k here so I need some advice.

cheers

That's a tough one. I'd say get some expert legal advice.

Sorry about this i posted it before but only got one reply just wondering if any more advice is out there at the moment?

 

 

I started working through an agency about 4 years ago on a standard PAYE basis. They badgered me into working through a composite company, which I did. The tax laws changed in this years budget and I transferred to a full LTD company status.

 

The question I have is this. When I first changed to composite company, the agency said I would receive £1 per hour pay rise as their contributions and payroll responsibilities etc reduced. Whoo hoo I thought. When the budget changes came into being I was presented with 2 options 1. go back to PAYE or 2. Go ltd company route, I chose the LTD route. A colleague of mine working via the same agency decided LTD was not for her and contacted the agency saying she wanted to go back to PAYE. She was then informed that if she did her rate would drop by £3.50 an hour to reflect the additional costs to the agency. Here goes… if it costs the agency £3.50 an hour to transfer someone back to PAYE why didn’t I receive £3.50 an hour increase when I went from PAYE to composite???? There is a shortfall of £2.50 an hour that presumably has been pocketed by the agancy for every hour I have worked for the last 3 years.

 

Is this legal? Would it just be considered good business? Or should I have been given the full saving that the agency has been sticking in their pockets? It certainly seems unfair that a company can suddenly change how much they cream off the top of my salary. I would have thought they should have come to me and said if you transfer to composite company it saves us £x per hour and use that as a negotiating start point.

 

Sorry for the long post but I am considering court action but we are talking about £20k here so I need some advice.

 

cheers

The money paid to you by the agency now is not your "salary", it is the fee your Ltd company is paid for your services by the agency. The agency is free to offer you whatever rate they like, and you are free to accept it or not. The agency is free to charge the client whatever they can and is not obligated to pay you a certain percentage of it.

At each change (PAYE, composite, LTD), there will have been a new contract, since the whole basis has changed. At each stage you were free to negotiate the overall charge for your services, as was the agency. If you accepted their offer, there you go.

I am not a lawyer, but I don't see that you have leg to stand on. Agencies remain in business by being good negotiators - their aim must always be to charge as much as possible to the client for your services which they hope to secure for as little as possible. If you want to play in those shark-infested waters then you need to learn to negotiate...