The Conduct of Employment Agencies and Employment Business Regulations 2003 (CEAEBR) were implemented to ensure proper conduct of employment agencies and employment businesses with the intention of protecting the people using them.
The regulations primarily protect permanent and temporary workers, but there are some specific sections dealing with limited company contractors, so we advise that you should understand them.
If you commence a contract for the supply of services, by default you are opted into the CEAEBR and you will:
- Have to agree terms prior to commencing a contract
- Have the option of working for the client post contact without penalty
- Receive guaranteed payments from the client, even without a signed timesheet
There is, however, a big issue with opting in and that concerns IR35 compliance and likelihood of operating more like an employee from a tax perspective.
Opting out of the CEAEBR helps limited company contractors to remain more flexible in their approach to the labour market. The considerable gain for opting out is:
- Avoiding payment guarantees supports IR35 compliance
In short, if you wish to have a limited liability company and enjoy the available tax advantages, IR35 compliance is a key point of consideration and opting out is the most secure choice.