With over 17 years of accountancy, tax advice and support services to contractors throughout the UK, Nixon Williams have a wealth of experience in guiding our clients through compliance.
The Basics You Need To Know.
The Agency Worker Regulations came into force on the 1st October 2011. They essentially regulate the working conditions of temporary workers by affording them the same pay, working hours and holiday allowances as regular employees. The agency worker qualifies for this equal treatment after working in the same job for 12 weeks. You can accumulate these weeks even if you only work a few hours a week.
Workers operating under an Umbrella company will effectively receive less pay over the period of the contract. This is because the Umbrella Company will have to hold back enough funds to pay for regular employee rights such as ‘out of contract’ pay. Ultimately leaving the agency worker to foot the bill. Those who can clearly demonstrate that they do not work under the direction and supervision of their hirer may be outside the scope of the AWR. However Umbrella contractors would find it impossible to demonstrate that they are in business on their own account, as they do not own a stake in the company
Become AWR Exempt.
To avoid the uncertainty and ensure you are risk free, we would encourage contractors to re-consider their trading options. For example, trading through a Limited Company has become increasingly popular, due to the greater flexibility, security and tax efficiency offered. Contractors and freelancers operating through their own limited company and are in business on their own account will generally be out of the scope of the Agency Worker Regulations.
Review the benefits of working through an AWR exempt Limited Company here.
The AWR are destined to shake up the use of temporary workers at all levels. Please refer to our full guide for an in depth review of everything you need to know about AWR.