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Agency Workers Regulations

The Agency Workers Regulations (AWR) came into force on 1 October 2011.

The Agency Workers Regulations apply to:

  • Agency workers
  • Temporary work agencies
  • End client hiring the temporary workers

How does this effect contractors using their own limited company?

Anyone who are in business on their own account will generally not be within the scope of the regulations.

Contractors and freelancers operating through their own limited company and are genuinely in business on their own account will generally be out of the scope of the Agency Worker Regulations.

Although IR35 is part of tax legislation and AWR is employment legislation, if a contractor is outside IR35 then it is highly likely that the contractor will also be outside of the AWR.

How does this effect umbrella companies and contractors who use them?

Contractors who work through umbrella companies will generally be caught by the AWR, as they would find it impossible to demonstrate that they are in business on their own account, as they do not own a stake in the umbrella company.

We have already seen some umbrella companies trying to move their contractor clients to a limited company option. Since the start of AWR we have seen more limited company formations by the accounting arms of the larger umbrella companies.